RMC No. 24-2016 — Reiterates the Department of Finance Order No. 149-95 for non-stock non-profit educational institutions

BUREAU OFINTERNAL RENENUE REPUBLIC OF THE PHILIPPINES DePArtMEnt OF FInAnCE Quezon City BUERAU OT WTHAA HN EN FECO RECEIVES FEB Z: 201S Q :s A.MA iA

February 24, 2016

REVENUE MEMORANDUM CIRCULAR NO 84-M

SUBJECT : Stock Non-Profit Educational Institutions Reiteration of Department of Finance Order No. 149-95 for Non

TO All Revenue Officials and Employees Concerncd

BACKGROUND

Section 4(3). Article XIV of the 1987 Constitution provides that--

purposes shall be exempt from taxess and duties. xxx institutions used actually, directly, and exclusively for educational "All revemues and assets of non-stock, non-profit educational

performance by such educational institution of its educational purpose or function. business or other activity the conduct of which is not related to the exercise or They shall, however, be subject to internal revenue taxes on income from trade

institutions are used actually, directly, and exclusively for educational purposes, Department Order (DO) No. 149-95! was issued by the Secretary of Finance in November 24, 1995. and yield from deposit substitute instruments of these non-stock non-profit educational To ensure that the exenpt interest income from Philippine currency deposits

withholding taxes on interest income from currency bank deposits and yield from deposit substitute instruments under Section 27(D)(1) of the Tax Code of 1997. as periodically require their submission of certificate of income tax exemption or tax educational institutions to substantiate the non-imposition of the 20% and 7/2% final rulings confirming their exemption from income tax as non-stock, non-profit In connection with this, depository banks of these educationa! institutions

amended.

the DOF DO 149-95 as part of their annual submission together with their Annual Income Tax Returns (BIR Form.1702)/Annual Information Returns (BIR Form 1702- AIF) and Audited Financial Statements. operated as non-stock, non-profit educational institutions that no longer comply with It has been observed that there are educational institutions organized and

iruplementing Section 4(3}, Article XIV ot the 1987 Constitution. : Amending Section 2(2.1) of Department Order No. 137-87. as amended hy Order No. 98-88

DOF DO No. 149-95

Circular No. 45-95 (December 1, 1995). DOF DO No. 149-95 was eariier circularized under Revenuc Memorandum

non-profit educational institutions, the following documents shall be subimitted on an annual basis to the Revenue District Officer (RDO)._together. with the annual information return and duly audited financial statement: Thus, this Circular is being issued to reiterate the requirements from non-stock.

income earncd from passive investments not subject to the 20% fina! a} Certification from their depository banks as to the amount of interest

withholding tax imposed by Section 24(e) of the Tax Code, as amended:

b Certification of actual utilization of the said income; and

C (i.e. construclion and/or improvement of school building and facilities: acquisition of equipment, books and the like) to be funded out of money Board Resolution by the school administration on proposed projects.

deposited in banks or placed in money markets.

determine compliance with the conditions set forth in the certificate of exemption and the tax liabilities, if any... The RDO shall conduct an audit of the annual information return filed to

publicity as possible. All revenue officials and employees are enjoined to give this Circular as wide a

Commissioner of Internal Revenue KIM S. JACINTO-HENARES

K -1 BUEHAU OF INIERNAL REVENUE RECORS MGA DVSION FEB Z L 2018 G:isA.M. 039170

M RECEIVETO

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