REVENUE MEMORANDUM CIRCULAR NO. 8-2014 issued on February 6, 2014 requires the presentation of Tax Exemption Certificate or Ruling by Exempt Individuals and Entities.

       Under the provisions of existing tax laws and administrative issuances, some individuals, entities and transactions are considered exempt from imposition of taxes on income and, consequently, from Withholding Taxes.

       In this regard, the concerned withholding agents shall require all individuals and entities claiming 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 as 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.