TAX EXEMPTION OF EDUCATIONAL INSTITUTIONS

NON-STOCK, NON-PROFIT PROPRIETARY

REAL PROPERTY TAX Exempt (RCE, ADE), Consti
REVENUE TAX Exempt
VAT (Condition: income received as such)
LBT Sec 30(H), NIRC
Issue on Use of the income:
Last paragraph of Sec 30, income
from property or income from
activity conducted for profit,
regardless of disposition, is subject
to tax.
(Stock, Non-Profit/Profit)
As amended by RA 11635, the
requirement of “Non-Profit” is now
only applicable to Hospitals
Exempt (RCE, ADE), Consti
10%
Preferential Rate
(Condition: income from unrelated
business or other activity does not
exceed 50% of the total gross
income)
25% or 20%
Regular Corporate Income Tax
if the above condition is not met

In DLSU Case, SC ruled that the last

paragraph of Sec 30 is not applicable
to NSNP-EI if the income is ADE for
educational purpose.

Exempt (ADE), Consti

If not ADE, income from activity

conducted for profit is taxable

Issue on Source of the Income:

The Consti did not qualify. Thus, the

income is exempt from taxes and
duties regardless of the source, as
long as ADE use.

VAT Exempt
(Condition: Educational Services
rendered by private schools duly
accredited by DepEd, CHED,
TESDA and government educational
institutions)
Sec 109(1)(H), NIRC