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"

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE RECORDE MGT DIVISION JUL 2 6 2016/+ 1;4S PM M

RECEI NE

July 25, 2016

revenue memorandum order no. _44 - 20/4

SUBJECT : Amending Revenue Memorandum Order No. 20-2013, as amended (Prescribing the Policies and Guidelines in the

Non-Profit Corporations and Associations under Section 3o of Issuance of Tax Exemption Rulings to Qualified Non-Stock,

the National Internal Revenue Code of 1997, as Amended)

TO : All Revenue Officials and Personnel and Others Concerned

Order is being issued to exclude non-stock, non-profit educational nature and tax status of non-profit, non-stock educational institutions , this institutions from the coverage of Revenue Memorandum Order No. 2o- 2013, as amended. In line with the Bureau's commitment to put in proper context the

portion of which reads : non stock, non profit educational institutions is directly conferred by paragraph 3, Section 4, Article XIV of the 1987 Constitution, the pertinent SEcTIoN 1. Nature of Tax Exemption --- The tax exemption of

profit educational institutions used actually, directly "All revenues and assets of non-stock, non-

exempt from taxes and duties." and exclusively for educational purposes shall be

1997 Tax Code, as amended, which provides as follows : This constitutional exemption is reiterated in Section 30 (H) of the

The following organizations shall not be taxed under this Title in respect to income received by them as such: "Sec.3o. Exempt from Tax on Corporations.

XXX XXX XXX

(H) A non-stock and non-profit educational institution; xxx.

its purpose as an educational institution and used actually, directly and for the constitutional exemption t constitutionally exempt from tax on all revenues derived in pursuance of exclusively for educational purposes. This constitutional exemption gives the non-stock, non-profit educational institutions a distinct character. And rulings affirm the doctrinal rule that the school must be non-stock and provision It is clear and unmistakable from the aforequoted constitutional that non-stock, non-profit educational institutions are no enjoyed, jurisprudence and tax are only two requisites : (1) The ; and (2) The income is actually. directly and exclusively used for educational purposes. There are no other conditions and limitations.

Ianguage of the Constitution. stock and non-profit educational institutions should not be implemented or interpreted in such a manner that will defeat or diminish the intent and In this light, the constitutional conferral of tax exemption upon non-

profit educational institutions shall file their respective Applications for Tax Exemption with the Office of the Assistant Commissioner, Legal Service, Attention: Law Division. SECTION 2. Application for Tax Exemption. --- Non- stock, non-

non profit educational institution shall submit the following documents: SECTION 3. Documentary Requirements. --- The non stock

a. Original copy of the application letter for issuance of Tax Exemption Ruling;

b. Certified true copy of the Certificate of Good Standing issued by the Securities and Exchange Commission;

c. Original copy of the Certification under Oath of the Treasurer as to the amount of the income, compensation, salaries or any emoluments paid to its trustees, officers and other executive officers; BUREAU OF INTERNAL REVENUE RECORDS MGT DIVISION JUL 2 S 2016 I45 P.M A

RECEIVED

d. Certified true copy of the Financial Statements of the corporation for the last three (3) years;

e. Certified the appropriate government agency (i.e., CHED, DepEd, or recognition/permit/accreditation to operate as an educational institution was issued five (5) years prior to the application for tax TESDA) shall be submitted as proof that the non-stock and non- profit educational institution is currently operating as such; and accreditation to operate as an educational institution issued by the Commission on Higher Education(CHED), Department of Development Authority (TESDA); Provided, that if the government exemption, an original copy of a current Certificate of Operation/Good Standing, or other equivalent document issued by Education true (DepEd), or Technical Education and Skills copy of government recognition/permit/

f. Original copy of the Certificate of utilization of annual revenues and assets by the Treasurer or his equivalent of the non-stock and non-profit educational institution.

course of review of the application for tax exemption, the Bureau may require additional information or documents as the circumstances may warrant SectIon 4. Request for Additional Documents.-- In the

educational institutions shall remain valid and effective, unless recalled for valid grounds. They are not required to renew or revalidate the Tax exemption rulings previously issued to them. Exemption Rulings or Certificates of Tax Exemption of non- stock, non-profit Section 5. Validity of the Tax Exemption Ruling.--- Tax

materiai changes in the character, purpose or method of operation of the corporation The Tax Exemption Ruling shall be subject to revocation if there are which are inconsistent with the basis for its income tax exemption.

the Bureau and for purposes of a better system of monitoring, non-profit educational institutions with Tax Exemption Rulings or Certificates SEcTION 6. Transitory Provisions.--- To update the records of non-stock.

BUREAU OF INTERNAL REVENUE RECORDS MGT, DIVISION JUL 2s 2016./+ 1:47 P.M. Aeo

RECEIVED

of Exemption issued prior to June 30, 2012 are required to apply for new Tax Exemption Rulings.

inconsistent with this Order is deemed revoked, repealed, or modified accordingly. SECTION 7. Repealing Clause.--- Any revenue issuance which is

SECTION 8. Effectivity.-- This Order shall take effect immediately

Commissioner of Internal Revenue CAESAR R. DULAY

000159

BUREAU OF INTERNAL REVENUE RECORDS MGT. DIVSION JUL 26 2016/+ I: 45""PM: iMugA

RECEIVED