RMC No. 08-2014 — Requires the presentation of Tax Exemption Certificate or Ruling by Exempt Individuals and Entities

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPArtMENt OF FInAnCE Quezon City BUREAU OF INTENNAL RAVANUI RECORDS MGT DIVISION RECEIVED fEB 0 6 2014 L 9:53AM Ue

Date:Fobruary 6. 2014

REVENUE MEMORANDUM CIRCULAR NO._ 8 - 20 14

SUBJECT Presentation of Tax Exemption Certificate or Ruling by Exempt

Individuals and Entities

# TO All Banks and Others Concerned

Code), defines taxable income as: Section 31 of the National Internal Revenue Code of 1997, as amended (Tax

"Section 31. Taxable Income Defined. -- The term 'taxable

this Code, less the deductions and/or personal and additional inconie' means the pertinent items of gross income specified in exemptions. if any, authorized for such types of income by this Code or other special laws.

Section 27(A) of the Tax Code defines gross income as follows: In connection with Section 3 1 as defined above, Section 32(A) in relation to

"(A) General Definition. -- Except when otherwise provided in whatever source, including (but not limited to) the following irems: this Title, gross income means all income derived from

1 2 3 4 Interests; business or the exercise of a profession; Gains derived from dealings in property: Compensation for services in whatever form paid. commissions, and similar items; Gross income derived from the conduct of trade or including, but not limited to fees, salaries, wages.

6 (7) () i } 5 Prizes and winnings:: Royalties; Rents: Dividends: Annuities:

10) Pensions: and

Partner's distributive share from the net income of the general professional partnership."

Page 2 of '2 Revenue Memorandum ('ircular No

Pursuant to Sections 57 to 59 and Sections 78 to 83 of the Tax Code, in relation to Revenue Regulations (RR) No.:02-1998, as amended, certain items of income are made subject to the payment of withholding taxes (final lax. prescribed therein. creditable/expanded withholding iax. withholding tax on compensation) at the rates

Under the provisions of existing tax laws and administrative issuances. however. some individuals, entities and transactions are considered exempt from imposition of taxes on income and. consequently, from withholding taxes.

issuances and any issuance that may be issued from time to time, before payment of the reiated income. The tax exemption certificate or ruling must explicitly recognize the grant of tax exemption, as well as the corresponding exemption from imposition of withholding tax. Failure on the part of the taxpayer to present the said tax and entities claiming such exemption to provide a copy of a valid, current and subsisting tax exemption certificate or ruling. as per existing administrative exemption certificate or ruling as herein required shall subiect him to the payment of In this regard, the concerned withholding agents shall require all individuals

appropriate withholding taxes due on the transaction. On the other hand, the withholding agent's failure to withhold notwithstanding the iack of tax exemption certificate or ruling shall cause the imposition of penalties under Section 251 and other pertinent Sections of the Tax Code.

This Circular revokes all other circulars or issuances inconsistent with it. All concerned revenue officials and employees are hereby enjoined to give this Circular as wide a publicity as possible.

This Circular takes effect immediately

G BURFAU OF INTERNAL REVENUE RECORPS MGT.DIVISION Commissioner/of Internal Revenue KIM S. JACIN 020891 FO-HENARES