An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes
Republic Act No. 11635 amends Section 27 (B) of the National Internal Revenue Code of 1997, establishing a reduced tax rate of 1% on the taxable income of nonprofit hospitals and proprietary educational institutions from July 1, 2020, to June 30, 2023. If these institutions earn more than 50% of their total gross income from unrelated trade or business activities, the standard tax rate applies to their entire taxable income. The Department of Finance is tasked with creating the necessary rules for implementation. The Act includes provisions for separability, repeal of inconsistent laws, and states that it will take effect 15 days after publication.
Quick Answers
- What is An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes about?
- Republic Act No. 11635 amends Section 27 (B) of the National Internal Revenue Code of 1997, establishing a reduced tax rate of 1% on the taxable income of nonprofit hospitals and proprietary educational institutions from July 1, 2020, to June 30, 2023. If these institutions earn more than 50% of their total gross income from unrelated trade or business activities, the standard tax rate applies to their entire taxable income. The Department of Finance is tasked with creating the necessary rules for implementation. The Act includes provisions for separability, repeal of inconsistent laws, and states that it will take effect 15 days after publication.
- What type of law is Republic Act No. 11635?
- An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes (Republic Act No. 11635) is a Philippine Statutes enacted by the Congress of the Philippines.
- When was An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes enacted?
- An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes (Republic Act No. 11635) was enacted on Dec 10, 2021.
- What is the citation for An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes?
- An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes, Republic Act No. 11635, Dec 10, 2021 (Philippines)
Law Information
- Reference Number
- Republic Act No. 11635
- Date Enacted
- Category
- Statutes
- Subcategory
- Republic Acts
- Jurisdiction
- Philippines
- Enacting Body
- Congress of the Philippines
Full Law Text
December 10, 2021
REPUBLIC ACT NO. 11635
AN ACT AMENDING SECTION 27 (B) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES
SECTION 1. Section 27 (B) of the National Internal Revenue Code of 1997, as amended, is hereby 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."
SECTION 2. Implementing Rules and Regulations. — The Department of Finance shall promulgate the necessary rules and regulations for the effective implementation of the provisions of this Act.
SECTION 3. Separability Clause. — If any portion or provision of this Act is subsequently declared invalid or unconstitutional, other provisions hereof which are not affected thereby shall remain in full force and effect.
SECTION 4. Repealing Clause. — All laws, decrees, executive orders, rules and regulations or parts thereof which are inconsistent with this Act are hereby repealed, amended or modified accordingly.
SECTION 5. Effectivity. — This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.
Approved: December 10, 2021.
Cite This Law
An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes, Republic Act No. 11635, Dec 10, 2021 (Philippines)
An Act Amending Section 27 (B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes, Republic Act No. 11635 (Phil. 2021)
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