Discontinuance of Withholding of Taxes on Payments to the BSP

BaNexo SeNrRaL Nc; PIUIpINAs; OFFICE OF THE DEPUTY GOVERNOR FINANCIAL SU PERVISION SECTOR crRcurAR LETTER NO. Cr-2020- 009 To AtL BSP.SUPERVISED FINANCIAT INSTITUTIONS AND OPERATORS OF PAYMENT SYSTEMS Subject Discontinuance of Withholding of Taxes on Payments to the BSP This is to advise all BSP-supervised financial institutions (BSFls) and operators of payment systems (OPSs) of the issuance of Revenue Regulation (R.R.) No. 2-2O2O of the Bureau of Internal Revenue (copy attached) that implements the tax exemption provision of Republic Act (R.A.) No. 11211, An Act Amending Republic Act Number 7653, Otherwise Known as "The New Central Bank Act", and for Other Purposes. In particular, the R.R. No. 2-2020 provides that the BSP shall be exempt from all national internal revenue taxes on income derived from its governmental functions: (a) income from its activities or transactions in the exercise of its supervision over the operations of banks and its regulatory and examination powers over non-bank financial institutions performing quasi-banking functions, money service businesses, credit granting businesses and payment system operators; and (b) income in pursuit of its primary objective to maintain price stability conducive to a balanced and sustainable growth of the economy, and the promotion and maintenance of monetary and financial stability and the convertibility of the peso. All other incomes not included in the above enumeration shall be considered proprietary income and shall be subject to all applicable national internal revenue taxes. In this respect, all BSFIs and OPSs can now discontinue the withholding of taxes on their payments to the BSP in relation to the above-mentioned transactions or activities. For information and guidance. IG. FONACIER puty Governor ll rebruary2o2o A. Mabini St., Malate 1004 Manila, Philippines. (632) 8708 7701 . www.bsp,gov.ph . [email protected]

OF ll"Ttrct{a'l |\ltrh REPUBLIC OF THE PHILIPPINES DEPARTMENTOF FINANCE BUREAU OF INTERNAI RWENUE Quezon City ]]} REyEIqUE RE6ITLATIONS NO. g- 2020 RECORDS ML.T. DI\,Ib .lAN | 5 2028 SUBJECT Implements the Ta,x Exemption provisions of Republic AotNo. ll27l, Otherwise Known as "An Act Amending Republic Act Number 7653, Othenvise Known as "TheNew Cenhal Bank Act", and for Other Purposes" TO All Internal Revenue Officers and Other Concemed SECTION f. SCOPE. - Pursuant to the provisions of Section 244 of the National Internal Revenue Code ('NIRC'), as amended, the folloudng Regulations are hereby promulgated to implement the tax provisions of R.A. No. 1l2l l, otherwise known as "An Act Amending Republic Act Number7653, Otherwise Known as "The New Central Bank Act", and for Other Purposos". SECTION 2. CO\|ERAGE. These regulations cover all income of the Bangko Sentral ng Pilipinas (BSP) considered as derived from govemmental functions, such as those activities in the purnrit of BSP's primary objectives to exercise of its supervision over the operations of banks and its regulatory and examination powers over non-bank financial institutions performing quasi-banking funotions, money service businesses, credit granting businesses and payment system operators, and to maintain price stability, monetary and financial stability and the convertibility of the peso. SECTION 3. TA)( EXEilIPTION. - The BSP shall be exempt from all national internal revenue taxes on income derived from its govemmental functions, specifically: (a) income from its activities or transactions in the exercise of its supervision over the operations of barrks and its regulatory and examination powers over non-bank financial institutions performing quasi-banking functions, money service businesses, credit granting businesses and payment system operators; and (b) incorne in pursuit of its primary objective to maintain price stability conducive to a balanced and sustainable growth of the economy, and the promotion and maintenance of monetary and financial stability and the convertibility of the peso. All other incomgs not included in the above enumeration shall be considered as proprietary ii:.come and shall be subject to all applicable national internal rc\.cllue taxes. SECTION 4. REPE.\LING CLAUSE. All revenuc rules and regulations, and othcr- revcmrc is.suances or parts thereof rvhich are inconsistent with these lteg.ulations are hereby repealed or rnodified acbordingly 'f\ €FrF . . c\-Jt \,,

g t. r SECTION 5. EFFECTIVITY. These Regulations shatl take effect fifteen (15) days after publication in the Official Gazntte or in a newspaper of general circulations, whichever comes first. CAITLOS G. DOMINGU Secretary of Finance DEC Z 0 ?01s Recommending Approval : ,rl,-al+.q'''AX}1z CAESAR R. DULAY Commissioner of Internal Revenue 031 2I I K-l F INTtrRNAL r152020 )lO an.r tr rdclus rr, u r, oivl's ro N=