RMC No. 134-2024: Circularizing Republic Act No. 12063, titled “An Act Institutionalizing the Enterprise-Based Education and Training Framework and Appropriating Funds Therefor”

Key points

1. Donations to TVIs. Donations, contributions, bequests, subsidies or financial aid paid to a Technical Vocational Institution (TVI) implementing theoretical instruction for EBET Programs within the taxable year are exempt from donor’s tax. They are deductible from the donor’s gross income, subject to the NIRC. TVIs need not obtain accreditation but must secure proper certification from the TESDA.
2. Tax and duty exemption. Donations and aid certified by the TESDA as actually, directly and exclusively for a required EBET Program are exempt from taxes and duties.
3. Additional deduction. An enterprise with a registered EBET Program gets an additional deduction from taxable income of fifty percent (50%) of actual training expenses until December 31, 2027. From January 1, 2028 it rises to seventy-five percent (75%). The deduction cannot exceed five percent (5%) of total direct labor expenses or Twenty-five million pesos (P25,000,000.00) a year, whichever is lower, and requires TESDA certification.
4. Choice for IPA-registered enterprises. An enterprise registered with an investment promotion agency may choose the incentives under this Act or the fiscal incentives under Title XIII of the NIRC. Availing of Title XIII incentives precludes availing of the Act’s incentives at the same time.

Who is affected

• Donors to Technical Vocational Institutions
• Enterprises implementing a registered EBET Program
• Enterprises registered with an investment promotion agency

Deadlines and effectivity

• 50% additional deduction until December 31, 2027
• 75% additional deduction starting January 1, 2028