What is a tax exemption?
A tax exemption refers to an individual’s or an organization’s legal right to exclude all or a percentage of income/transactions from taxation. If an income or transaction is tax-exempt or tax-free, it is not part of the tax computation. This results in either lower taxes or no tax at all.
How to get a certificate of tax exemption.
Travelers applying for a visa and students applying for a scholarship can get a certificate of tax exemption from the BIR. This document—also called the BIR Certification of Exemption from Non-Filing of Income Tax—is what you need to secure if you can’t submit an income tax return (ITR) because you’re tax-exempt.
Requirements for BIR certificate of tax exemption.
- A notarized affidavit of non-filing of ITR/no income/as OFW from a notary public (must include details such as the source of income [if any], the reason for non-filing of ITR, and purpose of the certification)
- Barangay Clearance or Barangay Certificate of Indigency
- Certificate of No Property (a document certifying you’re not paying real estate tax) from the city/municipal assessor’s office)
- For OFWs/children of OFWs: Overseas Employment Certificate (OEC) or any certification from the POEA that you or your parent is an overseas worker
Steps to apply for certificate of tax exemption.
- Go to the Revenue District Office (RDO) having jurisdiction over your place of residence
- Proceed to the Taxpayer Service Section and submit the requirements for the certificate of tax exemption.
- Pay the certification fee (Php 100) and documentary stamp tax (Php 15).
- Receive the certificate from the BIR officer.
If you’re a student, you can apply for tax exemption certification by yourself—no need for your parents to accompany you, especially if they live too far away. The BIR doesn’t require the presence of the tax-exempt parents when processing a certificate of tax exemption for students.
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