RMO No. 44-2016: Amends RMO No. 20-2013, as amended re: “Prescribing 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”

Summary

RMO No. 44-2016 amends RMO No. 20-2013, as amended, on tax exemption rulings for non-stock, non-profit corporations and associations under Section 30 of the NIRC of 1997, as amended, as it applies to educational institutions.

Key points

1. Requisites for exemption. A non-stock, non-profit educational institution enjoys the 1987 Constitution exemption on two requisites: it is non-stock and non-profit, and its income is actually, directly and exclusively used for educational purposes. There are no other conditions and limitations.
2. Where to apply. Applications go to the office of the Assistant Commissioner, Legal Service, Attention: Law Division.
3. Documents required. The application letter, a certified true copy of the SEC Certificate of Good Standing, and the Treasurer’s sworn certification of pay to trustees, officers and executive officers. Also required are certified financial statements for the last three (3) years, a certified true copy of recognition, permit or accreditation from CHED, DepEd or TESDA, and the Treasurer’s certificate of utilization of annual revenues and assets. The BIR may require more information or documents.
4. Older recognition. If the government recognition, permit or accreditation was issued five (5) years before the application, an original current Certificate of Operation/Good Standing or an equivalent document from CHED, DepEd or TESDA is submitted to show the institution is currently operating.
5. Validity and revocation. Rulings and Certificates of Tax Exemption stay valid unless recalled for valid grounds, and need no renewal or revalidation. They can be revoked if material changes in character, purpose or method of operation are inconsistent with the basis for the Income Tax exemption.
6. Older rulings. Institutions with Tax Exemption Rulings or Certificates of Exemption issued prior to June 30, 2012 must apply for new rulings.

Who is affected

• Non-stock, non-profit educational institutions

Deadlines and effectivity

• Rulings issued prior to June 30, 2012 require a new application
• Rulings stay valid unless recalled, with no renewal required

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.