The Bureau of Internal Revenue (BIR) has made it clear there are only two requisites for the revenues of an educational institution (institution) to be exempt from taxes and duties: (1) The educational institution must be non-stock and non profit. (2) The revenue or income is actually, directly and exclusively used for educational purposes.

Revenue Memorandum Order (RMO) No. 44-2016 now excludes these institutions from the coverage of RMO No. 20-2013, to the extent that:

1. Applications for tax exemptions (application) shall be filled with the Office of the Assistant Commissioner of Internal Revenue (ACIR), Legal Service, at the BIR National Office.

2. The resulting tax exemption ruling or certificate of exemption (certificate) shall remain valid and effective, unless recalled for valid grounds.

Previously, an institution would have to file its application with the Revenue District Office (RDO) having jurisdiction over it, and the RDO would make its evaluation of the application before endorsing the same to the national office. This saves the institution valuable time with regard the processing of its application.

Education and taxes