Law Summary
Conditions Triggering Full Application of Regular Tax Rates
- If gross income from unrelated trade, business, or other activities exceeds 50% of the total gross income of the institution, the regular income tax rate under Subsection (A) of Section 27 is imposed on the entire taxable income.
- "Unrelated trade, business or other activity" means any activity not substantially related to the primary purpose or function of the educational institution or hospital.
Definition of Proprietary Educational Institution
- Defined as any private school maintained and administered by private individuals or groups.
- Must have an issued permit to operate from the Department of Education (DepEd), Commission on Higher Education (CHED), or Technical Education and Skills Development Authority (TESDA) depending on the level and type of education.
- Operates in accordance with existing laws and regulations.
Rulemaking Authority
- The Department of Finance (DOF) is empowered to promulgate rules and regulations necessary for the effective implementation of this Act.
Separability Clause
- If any provision or part of the Act is declared invalid or unconstitutional, the remainder of the Act continues to be in full force and effect.
Repealing Clause
- Any existing laws, decrees, executive orders, rules, or regulations inconsistent with this Act are repealed, amended, or modified accordingly to conform with this Act.
Effectivity of the Act
- The Act takes effect fifteen (15) days after its publication in the Official Gazette or a newspaper of general circulation.