Summary
RMC No. 14-2020, issued February 24, 2020, clarifies the taxability of the Bangko Sentral ng Pilipinas (BSP) under Republic Act (RA) No. 11211, which amends Section 125 of RA No. 7653 (The New Central Bank Act).
Key points
- Governmental versus proprietary income. BSP income from its governmental function, as provided under Revenue Regulations No. 2-2020, is exempt from all national internal revenue taxes. All other income is proprietary and subject to all national internal revenue taxes.
- Taxable proprietary income. Proprietary income subject to Income Tax and Withholding Tax includes income from sale of printed securities, BSP forms, scrap items, commemorative medals, demonetized notes and coins, and souvenir items. It also covers parking fees, rental income, realized profits from other assets sold, income from sale of shredded records and car stickers and passes, and bidding or auction sales of scrap, waste and unserviceable furniture and equipment.
- Governmental function income. Income from the exercise of the BSP’s governmental function is exempt from Income Tax and not subject to Withholding Tax, as specified in the Circular.
- VAT and DST. The BSP is exempt from VAT on revenues and receipts from essential governmental functions, as provided under RMC No. 65-2008. Under Section 199 (L) of the Tax Code, as amended, its business contracts, deeds, documents and transactions that require Documentary Stamp Tax are exempt.
Who is affected
- Bangko Sentral ng Pilipinas (BSP)
Deadlines and effectivity
- The exemption under RA No. 11211 took effect on March 6, 2019
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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