Revenue Memorandum Circular (RMC) No. 8-2014 was issued by the bureau with regards to the presentation of Tax Exemption Certificate or Ruling by Exempt Individuals and Entities.
The BIR cited that under the provisions of existing tax laws and administrative issuances, however, some individuals, entities and transactions are considered exempt from imposition of taxes on income and, consequently, from withholding taxes.
With this, the concerned withholding agents, the RMC require all individuals and entities claiming such exemption to provide a copy of a valid, current and subsisting tax exemption certificate or ruling, as per existing administrative issuances and any issuance that may be issued from time to time, before payment of the related income. The tax exemption certificate or ruling must explicitly recognize the grant of tax exemption, as well as the corresponding exemption from imposition of withholding tax.
Failure on the part of the taxpayer to present the said tax exemption certificate or ruling herein required shall subject him to the payment of appropriate withholding taxes due on the transaction. On the other hand, the withholding agent's failure to withhold notwithstanding the lack of tax exemption certificate or ruling shall cause the imposition of penalties under Section 251 and other pertinent Sections of the Tax Code.
Pursuant to Sections 57 to 59 and Sections 78 to 83 of the Tax Code, in relation to Revenue Regulations (RR) No. 02-1998, as amended, certain items of income are made subject to the payment of withholding taxes (final tax, creditable/expanded withholding tax, withholding tax on compensation) at the rates prescribed therein.
It was also mentioned that the Circular revokes all other circulars or issuances inconsistent with it
Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/82437RMC%20No%208-2014.pdf of the full text RMC No. 8-2014.
