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RMC No. 14-2020

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REVENUE MEMORANDUM CIRCULAR NO. 14-2020 issued on February 24, 2020 clarifies the taxability of the Bangko Sentral ng Pilipinas (BSP) pursuant to Republic Act (RA) No. 11211 amending Section 125 of RA No. 7653 (The New Central Bank Act) and other existing laws and revenue issuances.

Income/revenues of the BSP derived from the exercise of its governmental function as provided under Revenue Regulations No. 2-2020 shall be exempt from all national internal revenue taxes while all other income not considered as derived from its governmental functions shall be considered as proprietary income and shall be subject to all national internal revenue taxes.
The following income derived from the exercise of BSP’s proprietary function are subject to Income Tax and consequently subject to Withholding Tax:
a. Income from sale of Printed Securities – This includes, but not limited to, income earned from printing of Security Documents for Bureau of Immigration, Certificates of Professional Regulation Commission, Certificates for Technical Education and Skills Development Authority (TESDA), and Judicial Land Titles;
b. Income from sale of BSP forms, such as sale of bid forms, location maps, and vicinity maps of the properties;
c. Sale of Scrap items – This includes income from sale of old machinery, cans, boxes, drums, etc., as well as, penalty imposed for late delivery;
d. Parking fees collected for use of parking areas by BSP tenants;
e. Income from sale of commemorative medals;
f. Income from sale of demonetized commemorative notes and coins;
g. Income from sale of demonetized notes and coins;
h. Sale of corporate gifts and other souvenir items, excluding printed publications;
i. Rental income arising from the rental of vault space by Presidential Commission on Good Governance (PCGG);
j. Rental collected/earned for the use of BSP owned and acquired properties and facilities therein;
k. Realized profits from assets sold other than those provided under paragraph II(B) of the Circular;
l. Income from sale of shredded records;
m. Income from sale of car stickers, security pass and other identification paraphernalia issued to the BSP employees and bank representatives;
n. Income from sale thru bidding/auction of scrap and waste materials;
o. Net gain from sale thru bidding/auction of unserviceable furniture and equipment; and
p. Other similar income derived by the BSP not categorically defined under the Circular.

Income that are considered as derived from the exercise of BSP’s governmental function and are exempt from Income Tax and consequently not subject to Withholding Tax are specified in the Circular. BSP is exempt from Value-Added Tax for its revenues and receipts derived from the exercise of essential governmental functions, as provided under Revenue Memorandum Circular No. 65-2008.

Pursuant to Section 199 (L) of the Tax Code, as amended, all contracts, deeds, documents and transactions related to the conduct of business entered into by BSP which require payment of Documentary Stamp Tax shall be exempted from the payment thereof.

The exemption granted under RA No. 11211 took effect on March 6, 2019.

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