BIR reduces tax exemption requirements for educational institutions

The Bureau of Internal Revenue (BIR) has issued an order reducing the tax exemption requirements of non-stock, non-profit educational institutions.

From 11 under Revenue Memorandum Order No. 20-2013, the number of requirements has been reduced to six under the newly issued RMO 44-2016.

In a statement Thursday, the BIR said it issued RMO No. 44-2016 in pursuance of President Rodrigo Duterte's mandate to cut bureaucratic red tape, speed up processing of transactions, and ease the burden of taxpayers and others who transact business with government offices.

Under RMO 44-2016, all non-stock, non-profit educational institutions shall only submit the following documentary requirements to have their application processed:

• Original copy of the application letter for issuance of tax exemption ruling;
• Certified true copy of the Certificate of Good Standing issued by the Securities and Exchange Commission;
• 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;
• Certified true copy of the Financial Statements of the corporation for the last three years;
• Certified true copy of government recognition/permit/accreditation to operate as an educational institution issued by the Commission on Higher Education (CHED), Department of Education (DepEd), or Technical Education and Skills Development Authority (TESDA);
• Original copy of the Certificate of utilization of annual revenues and assets by the Treasurer or his equivalent of the non-stock, non-profit educational institution

"The Tax Exemption Rulings or Certificates of Tax Exemption issued to non-stock, non-profit educational institutions shall remain valid and effective, unless recalled for valid grounds," the BIR said.

"The said non-stock, non-profit institutions are not required to renew or revalidate the Tax Exemption Rulings previously issued to them," it added.

Under RMO No. 20-2013, the validity period is three years from the date of the effectivity specified in the ruling.

However, educational institutions with tax exemption certificates issued prior to June 30, 2012 are required to apply for new tax exemption rulings to enable the BIR to update its records and ensure a better system of monitoring. —John Ted Cordero/KBK, GMA News