RMC No. 123-2024: Clarification on the validity of a Certificate of Tax Exemption issued to certain corporations

Key points

1. Entities outside the 3-year validity. The period does not apply to non-stock and non-profit educational institutions under Section 30 (H) of the Tax Code and RMO No. 044-2016. It also does not apply to Homeowners’ Associations under RA No. 9904 and RMC No. 09-2013, as amended, or to non-stock savings and loan associations under RA No. 8367 and RMC No. 9-2016.
2. Retirement benefit plans. The 3-year period also does not apply to the CTE, also known as Certificate of Qualification, of an employees’ retirement benefit plan under RA No. 4917 and RR No. 1-68, as amended by RR No. 1-83.
3. Validity. These CTEs stay valid and effective unless the BIR recalls or revokes them for valid grounds.
4. Revalidation. A CTE is subject to revalidation if there are material changes in the character, purpose or method of operation of the corporation, or in the plan provisions, that are inconsistent with the basis for Income Tax exemption.

Who is affected

• Non-stock and non-profit educational institutions
• Homeowners’ Associations
• Non-stock savings and loan associations
• Employees’ retirement benefit plans

Deadlines and effectivity

• CTE valid unless recalled or revoked by the BIR for valid grounds