Revenue Memorandum Order No. 34-2014 was issued by the bureau clarifying certain provisions of Revenue Memorandum Order (RMO) No. 20-2013, as amended by RMO No. 28-2013, on the issuance of Tax Exemption Rulings for Qualified Non-Stock, Non-Profit Corporations and Associations under Section 30 of the National Internal Revenue Code of 1997, as amended.
Under II of the RMO No. 20-2014 stated the effects of non-filing, late filing and/or revocation of Tax Exemption Rulings under RMO No. 20-2013, as amended by RMO No. 28-2013:
Consistent with the nature of Tax Exemption Rulings, the absence of a valid, current and subsisting Tax Exemption Ruling will not operate to divest qualified entities of the tax exemption provided under the Constitution or Section 30 of the Tax Code.
Non-stock, non-profit entities which fail to secure a Tax Exemption Ruling for a given taxable year or shorter period (as in the case of late filers), are duty bound to prove compliance with the conditions laid down by the law and other pertinent administrative issuances in the event of a tax investigation.
Non-stock, non-profit entities which fail to renew their Tax Exemption Ruling before the lapse of its validity period may, nevertheless, file their applications with the Revenue District Office (RDO) where they are registered as soon they are able to do so. In the processing of these applications for Tax Exemption Rulings, the presentation of the previously issued tax exemption ruling or certificate is not necessary. In such case, the processing offices of the Bureau shall treat the same as a new application.
In accordance with RMC No. 8-2014, the failure of the non-stock, non-profit entity to present its valid, current and subsisting Tax Exemption ruling to the appropriate withholding agents shall subject such entity to the payment of the withholding taxes due on their transactions. On the other hand, the withholding agents' failure to withhold notwithstanding the lack of Tax Exemption ruling shall cause the imposition of penalties under Section 251 and other pertinent Sections of the Tax Code.
