Summary
RMO No. 34-2014 clarifies certain provisions of RMO No. 20-2013, as amended by RMO No. 28-2013, on Tax Exemption Rulings for qualified non-stock, non-profit corporations and associations under Section 30 of the NIRC of 1997, as amended.
Key points
- Scope of rulings. A Tax Exemption Ruling may discuss the tax treatment of income from activities conducted for profit. Entities with a valid and existing ruling are presumed compliant with the conditions for exemption on such income.
- No ruling does not remove exemption. Lacking a valid, current and subsisting ruling does not strip qualified entities of the exemption under the Constitution or Section 30 of the NIRC. Entities with no ruling for a taxable year or shorter period must prove compliance with the law’s conditions in a tax investigation.
- Late renewal. An entity that fails to renew before its ruling lapses may still apply with the Revenue District Office where it is registered. The earlier ruling need not be presented, and the application is treated as new.
- Withholding consequences. Under RMC No. 8-2014, an entity that cannot show a valid ruling to withholding agents is subject to the withholding taxes on its transactions. A withholding agent that fails to withhold despite no ruling faces penalties under Section 251 and other pertinent NIRC Sections.
- Umbrella organizations. A BIR-recognized umbrella organization or confederation may file for its member entities. It must submit a Board Resolution authorizing it, plus all documents required under RMO No. 20-2013.
Who is affected
- Qualified non-stock, non-profit corporations and associations
- Withholding agents
- Umbrella organizations or confederations recognized by the BIR
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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