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03-12-2001 Revenue Memorandum Circular No.

14-01
March 12, 2001
REVENUE MEMORANDUM CIRCULAR NO. 14-01
SUBJECT : Lists of Requirements from Taxpayers for Issuance of Certain
Rulings with Established Precedents Delegated to Regional Directors and to the
Assistant Commissioner, Legal Service under RMC Nos. 2-2001, 3-2001 and 10-2001.
TO : All Internal Revenue Officers and Others Concerned
In order to expedite the issuance of certain rulings with established precedents delegated
to the Regional Directors under RMC No. 3-2001 and to the Assistant Commissioner,
Legal Service under RMC Nos. 2-2001 and 10-2001, the lists of requirements to be
submitted by taxpayers are as follows:
A. Rulings Delegated to the Regional Directors
Under RMC No. 3-2001:
1. TAX EXEMPTION ON SALE OR DISPOSITION OF PRINCIPAL
RESIDENCE UNDER SECTION 24(D)(2) OF THE TAX CODE OF 1997 (RR No. 13-
99, AS AMENDED BY RR No. 14-2000)
a) Deed of Absolute Sale;
b) Transfer Certificate of Title (TCT);
c) Tax Declaration (TD);
d) Sworn statement from the Barangay Chairman where the principal residence is
located, that the same has been the seller's principal residence immediately prior to the
date of sale; if the principal residence is a condominium unit, the certification shall be
issued by the Administrator of the condominium building;
e) Sworn Declaration of Intent to avail of the exemption under Section 24(D)(2);
and
f) Escrow Agreement between the concerned RDO, the seller/transferor and the
Authorized Agent Bank. (Revenue Regulations No. 14-2000).
2. TAX EXEMPTION UNDER SECTION 30 OF THE TAX CODE OF 1997
a) Certificate of Registration with the Securities and Exchange Commission
(SEC);
b) Articles of Incorporation which must include the following provisions:
i) that the corporation is non-stock, non-profit;
ii) that the primary purpose for which it was created is one of those enumerated
under Sec. 30 of the Tax Code of 1997;
iii) that no part of the net income shall inure to the benefit of any its members;
iv) that the trustees do not receive any compensation; and
v) in case of dissolution, assets of the corporation shall be transferred to similar
institution or to the government;
c) By-Laws; and
d) Annual Information Return and Financial Statements for the last 3 years of
operation unless the non-stock, non-profit corporation is newly incorporated.
3. TAX EXEMPTION OF EDUCATIONAL INSTITUTIONS (non-stock, non-
profit educational corporations [1987 Constitutions])
Same requirements as those requesting tax exemption under Section 30 of the Tax Code
of 1997 and the current Department of Education, Culture and Sports (DECS), or the
Commission on Higher Education (CHED), or the Technical Education on Skills
Development Authority (TESDA) recognition, as the case may be.
4. TAX EXEMPTION OF COOPERATIVES UNDER RA NO. 6938, AS
AMENDED BY RA NO. 7716 AND RA NO. 8241
a) Articles of Cooperation and By-Laws;
b) Certificate of Registration and certificate of good standing issued by the
Cooperative Development Authority (CDA);
c) Certificate under oath by the Chairman/President/General Manager of the
Cooperative that it is transacting business with both members and non-members;
d) Certificate of Confirmation of Registration from CDA (in the case of
Cooperatives transacting business with non members already existing and previously
registered under PD 175, PD 775 and PD 898, before the creation of the CDA, the
reckoning period for the 10-year period of exemption is from March 10, 1987;
e) Certification under oath by the Chairman/President/General Manager of the
Cooperative (if previously registered as above stated), as to the amount of accumulated
reserves and undivided net savings, and that at least 25% of the net income is returned
to the members in the form of interest and/or patronage refund;
f) Latest Financial Statements duly audited by an independent Certified Public
Accountant (CPA); and
g) In the case of non-agricultural, non-electric and non-credit cooperative,
certification that the share capital contribution of each member does not exceed P
15,000.00.
5. TAX EXEMPTION OF SENIOR CITIZENS UNDER RA NO. 7432
a) Letter request from the senior citizen stating, among others, that his annual
taxable income does not exceed the poverty level of P60,000.00;
b) Certified true copy of Birth Certificate/Baptismal Certificate or in the absence
thereof, a certificate from the National Statistics and Census Bureau or an affidavit by
two (2) disinterested credible persons who know personally the senior citizen or OSCA
ID card;
c) If he has a benefactor as defined in Section 2(f) of Revenue Regulations No. 2-
94, Certification as to the name, address, occupation, office or business address
(office/business) and TIN of his benefactor;
d) If employed, a copy of his withholding tax statement (BIR Form W-2) for the
preceding taxable year; and
e) If self-employed, (i.e., practice of profession, or in business as single
proprietorship) a copy of his income tax return (ITR) for the preceding taxable year
together with the annual license or permit issued by the city or municipality where he
has his principal place of business, supported by a copy of his declaration of sales or
income.
6. TAX EXEMPTION OF NHA AND PRIVATE SECTOR PARTICIPATING IN
SOCIALIZED HOUSING, INCLUDING PARTICIPANTS IN COMMUNITY
MORTGAGE PROGRAM UNDER RA NO. 7279, AS IMPLEMENTED BY
REVENUE REGULATIONS NO. 9-93, AS AMENDED BY RR NO. 11-97
a) Copy of the Deed of Sale;
b) Copy of the Transfer Certificate of Title;
c) Copy of the corresponding Tax Declaration;
d) Photocopy of the receipt of payment of the Documentary Stamp tax;
e) Sworn Statement of taxpayer that the acquired raw land shall be used for
socialized housing project;
f) Approved HLURB Subdivision Preliminary and Location Clearance of the
Subdivision;
g) Certification from HLURB that taxpayer is engaged in socialized housing;
h) Certification from the HLURB that the sale of the socialized housing units to
qualified beneficiaries shall in no case exceed the maximum amount of P180,000.00
price ceiling;
i) Taxpayer Identification Number (TIN) of the seller and buyer.
7. EXTENSION OF TIME FOR THE FILING OF ESTATE TAX RETURN
UNDER SECTION 90 (C) OF THE TAX CODE OF 1997
a) Death Certificate; and
b) Letter Request from the taxpayer.
AND EXTENSION OF TIME TO PAY ESTATE TAX UNDER SECTION 91 OF THE
SAME CODE, BUT WHERE THE FILING OF THE BOND NOT EXCEEDING
DOUBLE THE AMOUNT OF THE TAX IS A NECESSARY REQUIREMENT.
a) Death Certificate;
b) Court Order, if estate is settled through the court (5 years extension);
c) Extra judicial settlement of estate (2 years extension); and
d) Letter Request from the taxpayer.
8. EXEMPTION FROM DONOR'S TAX UNDER SECTION 101 OF THE TAX
CODE OF 1997
a) Deed of donation;
b) Donor's Tax Return;
c) If real property, Transfer Certificate of Title & Tax Declaration; and
d) Certificate of accreditation issued by the Philippine Council for NGO
Certification (PCNC), if the donee is an accredited NGO under Section 34(H)(2)(c).
9. TAX EXEMPTION OF SEPARATION BENEFITS OF EMPLOYEES FOR
ANY CAUSE BEYOND THEIR CONTROL UNDER SECTION 32(B)(6)(b) OF THE
TAX CODE OF 1997. (IN CASE THE SEPARATION OF THE OFFICIAL OR
EMPLOYEE FROM THE SERVICE OF THE EMPLOYER IS DUE TO SICKNESS
OR OTHER PHYSICAL DISABILITY AND THE CONTINUOUS EMPLOYMENT
AND PERFORMANCE OF HIS REGULAR DUTIES WOULD ENDANGER HIS
PHYSICAL WELL-BEING, A MEDICAL REPORT TO THIS EFFECT, ISSUED BY A
GOVERNMENT HOSPITAL LOCATED WITHIN THE JURISDICTION OF THE
REVENUE REGION, MUST BE SUBMITTED BY THE TAXPAYER BEFORE THE
RULING SHALL BE ISSUED)
a) Sworn Affidavit to be executed by the Employer's physician and the head of
Office/Entity, attesting to the fact that the retiring/separated official or employee is
suffering from a serious illness that would effect the performance of his duties and
would endanger his life, if he would continue working; and
b) A certification to be issued by a government physician located within the
jurisdiction of the Revenue Region concerned confirming the findings of the employer's
physician.
10. TAX TREATMENT OF THE TRANSFER TO THE CONDOMINIUM
CORPORATION OF THE COMMON AREAS OF A CONDOMINIUM UNDER RA
NO. 4726, OTHERWISE KNOWN AS "THE CONDOMINIUM ACT"
a) Deed of Conveyance/Assignment;
b) Master Deed and Declaration of Restriction;
c) Secretary's Certificate; and
d) TCT and TD of the parcel of land subject of the Deed of
Conveyance/Assignment.
11. USE OF LOOSE-LEAF INVOICES/RECEIPTS AND BOOKS OF
ACCOUNTS (MANUAL)
a) Letter request from the taxpayer.
12. REQUEST FOR CHANGE OF ACCOUNTING PERIOD (EXCEPT CHANGE
OF ACCOUNTING METHOD) UNDER SECTION 46 OF THE TAX CODE OF 1997
a) Letter request from the taxpayer.
13. EXEMPTION FROM INCOME TAX AND, CONSEQUENTLY, FROM
WITHHOLDING TAX OF "DE MINIMIS BENEFITS" AS DEFINED AND
DISCUSSED IN RR NO. 2-98, RR NO. 3-98, RR NO. 8-2000, and RR NO. 10-2000,
INCLUDING: (1) Exemption from the "withholding tax on wages" of monetized ten
(10)-day vacation leave credit for employees of private entities; and (2) Exemption from
the "withholding tax on wages" of monetized leave credits of government employees;
a) Letter request from the taxpayer.
B. Rulings Delegated to the Assistant Commissioner, Legal Service
Under RMC No. 2-2001:
1. VAT EXEMPTION CERTIFICATE FOR EMBASSIES ISSUED ON THE
BASIS OF RECIPROCITY AS CONFIRMED BY THE OFFICE OF THE
PROTOCOL, DEPARTMENT OF FOREIGN AFFAIRS
a) Note Verbale by the requesting Embassy to the Department of Foreign Affairs
(DFA) informing the latter of the Embassy's intention to apply for the issuance of a VAT
Exemption Certificate/s for the Embassy and/or its Diplomats;
b) Endorsement/recommendation by the DFA Office of Protocol; and
c) A precedent BIR Ruling exempting the Embassy and its personnel from the
payment of value added tax.
2. CERTIFICATE OF TAX EXEMPTION FOR ASIAN DEVELOPMENT
BANK AND OTHER INTERNATIONAL ORGANIZATIONS BASED ON
INTERNATIONAL AGREEMENT
a) Letter of application of the qualified ADB Staff member (professional or higher
level);
b) Pro forma invoice showing the car's price and tax components separately;
c) Recommendation by the Asian Development Bank;
d) Recommendation by the Department of Foreign Affairs; and
e) Recommendation by the Department of Finance.
3. CERTIFICATE OF RESIDENCY ISSUED IN ACCORDANCE WITH THE
PROVISIONS OF TAX TREATIES BETWEEN THE PHILIPPINES AND OTHER
COUNTRIES
a) For Individuals Tax Identification No. (TIN) and/or latest income
tax/information return or passport or Embassy's Certification as to residency; and
b) For Corporations Securities and Exchange Commission (SEC) Registration
and BIR Registration (Note: Original should be presented).
4. CERTIFICATION OF REGISTRATION AS QUALIFIED DONEE
INSTITUTION IN ACCORDANCE WITH THE PROVISION OF REVENUE
REGULATION NO. 13-98 DATED JANUARY 1, 1999
a) Accreditation from the Philippine Council for NGO Certification (PCNC) 4/F
MSCB Bldg., 4718 Eduque Street, Makati City, Tel. No. 895-6169.
Under RMC No. 10-2001:
1. DENIAL OF CLAIM FOR INFORMER'S REWARD UNDER SECTION 282
OF THE TAX CODE OF 1997
a) Letter request of informer claiming for his reward enclosing his affidavit, if any,
including his supporting documents; and
b) Docket of case forwarded by the Tax Fraud Division recommending
disapproval of the claim.
2. ISSUANCE OF DISBURSEMENT VOUCHER FOR THE INFORMER'S
REWARD DULY APPROVED THE SECRETARY OF FINANCE
a) Whole docket of the case, together with the indorsement, signed by all the
members of the Committee on Reward, duly approved by the Secretary of Finance;
b) Certification from the Revenue Accounting Division of the actual remittance;
and
c) Certification from Revenue District Office where the informer is registered that
he/she has no outstanding tax liability.
3. ISSUANCE OF TAX CREDIT CERTIFICATE OR DISBURSEMENT
VOUCHER FOR TAX REFUND IN COMPLIANCE WITH THE DECISION OF THE
SUPREME COURT, COURT OF APPEALS AND COURT OF TAX APPEALS
WHICH HAS BECOME FINAL AND EXECUTORY
a) Writ of Execution issued by the Court; and
b) (Internal: Certifications from the Collection Service/Division that taxpayer has
no outstanding tax liability).
4. REQUEST FOR TAX EXEMPTION OF REASONABLE PRIVATE BENEFIT
PLAN
a) Actual Valuation Report;
b) Duly accomplished BIR Form No. 17.60;
c) Copy of the Retirement Plan;
d) Trust Agreement; and
e) Letter request for tax exemption.
5. REQUEST FOR CONFIRMATION THAT THE "REASONABLE PRIVATE
BENEFIT PLAN" IS STILL TAX EXEMPT DESPITE AMENDMENTS TO ITS
PROVISIONS
a) Copy of the Amendments to the provisions of the Retirement Plan; and
b) Letter request confirming its tax exempt status.
6. REQUEST FOR RENEWAL OF CONFIRMATION OF TAX EXEMPT
STATUS OF A "REASONABLE PRIVATE BENEFIT PLAN"
a) Certified true copy of the previously approved Private Benefit Plan; and
b) Letter request for renewal of confirmation of its tax exempt status.
7. REQUEST FOR RULINGS ON TOPICS COVERED BY REVENUE
MEMORANDUM CIRCULAR NO. 3-2001 OF TAXPAYERS FALLING WITHIN
THE JURISDICTION OF THE NATIONAL OFFICE
a) Same list of requirements as those requesting tax exemption under RMC 3-
2001.
C. All the above-mentioned rulings to be issued by the Regional Directors or the
Assistant Commissioner, Legal Service, should state the particular precedent ruling
number signed by the Commissioner, including the date when it was issued.
All internal revenue officers and others concerned are requested to give this Circular as
wide a publicity as possible.
(SGD.) RENE G. BAEZ
Commissioner of Internal Revenue