RMO No. 20-2013: Prescribes the policies and guidelines in the issuance of Tax Exemption Rulings to qualified non-stock, non-profit corporations and associations under Section 30 of the NIRC of 1997, as amended

Key points

1. Who files and where. Corporations and associations listed in Section 30, including those with rulings or certificates issued before June 30, 2012, file an Application for Tax Exemption/Revalidation with the RDO where they are registered. Only those duly qualified under Section 30 get a ruling.
2. Documents required. These include the application letter citing the Section 30 paragraph, SEC-issued Articles of Incorporation and By-Laws, sworn certifications by an executive officer and by the Treasurer, the BIR Certificate of Registration, and an RDO certification on pending cases. They also include income tax or annual information returns and financial statements for the last three (3) years, and a sworn statement on activities, expected receipts and expenditures, and revenues to be exempted. A corporation sole need not submit the Treasurer’s certification.
3. Extra requirements for schools. A non-stock, non-profit educational institution under Section 30(H) also submits its government recognition or permit from CHED, DepEd or TESDA. If that was issued more than five (5) years before, it adds a current Certificate of Operation/Good Standing. It also submits a Treasurer’s Certificate of utilization of annual revenues and assets, with a breakdown of amounts used for its purposes, asset purchases, related investments and amounts set aside for specific projects under a Board Resolution.
4. Validity and revocation. A ruling is valid for three (3) years from its stated effectivity, unless sooner revoked or cancelled. It is deemed revoked on material changes in character, purpose or method of operation inconsistent with the basis for exemption, effective as of the date of the change.
5. Renewal and loss of exemption. A ruling is renewed by a new application under the same requirements, for another three (3) years. If an annual information return is not filed, the organization automatically loses its exemption from the taxable year of the failure, in addition to Section 250 sanctions.
6. Older rulings. Rulings or certificates issued before June 30, 2012 stay valid until December 31, 2013. Those issued after June 30, 2012 stay valid for three (3) years from issuance, unless sooner revoked or cancelled.

Who is affected

• Non-stock, non-profit corporations and associations under Section 30 of the NIRC
• Non-stock, non-profit educational institutions under Section 30(H)
• Corporations sole

Deadlines and effectivity

• Ruling valid for 3 years from the stated effectivity
• Rulings issued before June 30, 2012: valid until December 31, 2013