Lists of Requirements from Taxpayers for Issuance of Certain Rulings

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 RMCNos.2-2001,3-2001 and10-2001 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; acIHDA 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 TDcAaH 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 IDaCcS 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