Revenue Memorandum Circular (RMC) No. 11-2022
February 18, 2022
Clarification and Guidance on Tax-Free Exchanges of Properties Under the CREATE Act
February 24, 2022
REVENUE MEMORANDUM CIRCULAR NO. 13-2022 issued on January 24, 2022, circularizes Republic Act No. 11635, titled “An Act Amending Section 27(B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes”.
The said Section is further amended to read as follows: “(B) Hospitals which are nonprofit and proprietary educational institutions shall pay a tax of ten percent (10%) on their taxable income except those covered by Subsection (D) hereof: Provided, That beginning July 1, 2020, until June 30, 2023, the tax rate herein imposed shall be one percent (1%): Provided, further, That if the gross income from unrelated trade, business or other activity exceeds fifty percent (50%) of the total gross income derived by such educational institutions or hospitals from all sources, the tax prescribed in Subsection (A) hereof shall be imposed on the entire taxable income. For purposes of this Subsection, the term ‘unrelated trade, business or other activity’ means any trade, business or other activity, the conduct of which is not substantially related to the exercise or performance by such educational institution, or hospital of its primary purpose or function. ‘Proprietary educational institution’ means any private school maintained and administered by private individuals or groups with an issued permit to operate from the Department of Education (DepEd), or the Commission on Higher Education (CHED), or the Technical Education and Skills Development Authority (TESDA), as the case may be, in accordance with existing laws and regulations.”
Source Links:
RMC 13-2022: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2022%20RMCs/RMC%20No.%2013-2022.pdf
RA 11635: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2022%20RMCs/RMC%20No.%2013-2022%20Annex%20A.pdf
