IMPLEMENTING THE PROVISIONS OF THE REPUBLIC ACT (RA) 11635, ENTITLED “AN ACT AMENDING SECTION 27 (B) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997 AS AMENDED, AND FOR OTHER PURPOSES” ON THE INCOME TAXATION OF PROPRIETARY EDUCATIONAL INSTITUTIONS AND HOSPITALS WHICH ARE NON-PROFIT (Revenue Regulations No. 3-2022, April 7, 2022)
- The following institutions shall be covered by the preferential ten percent (10%) corporate income tax rate.
- Proprietary Educational Institutions;
- Hospitals which are non-profit; and,
- Non-Stock, Non-Profit Educational Institutions whose net income or assets accrue/inure to or benefit any member or specific person.
- Provided that beginning July 1, 2020 until June 2023, the rate of one percent (1%) shall apply. After June 30, 2023 the rate shall revert back to the preferential corporate income tax rate of 10%.
- Regular corporate income tax shall apply on the entire taxable income if the gross income from unrelated trade or other business activity exceeds fifty percent (50%) of the total gross income. Moreover, a Non-Stock, Non-Profit Educational Institution shall be subject to the rate or 25% on the portions of its revenue or assets not used actually, directly and exclusively for educational purposes.
