Legal basis for the tax exemption
- The memorandum recognizes a Bureau of Internal Revenue (BIR) exemption tied to Section 109(2).
- The memorandum links the exemption framework to Republic Act No. 7716.
- The memorandum also links the exemption framework to Revenue Regulation No. 7-95.
- The exemption relates to registration requirements for tricycles.
Scope: who is covered and the tax types
- The exemption covers tricycle operators.
- The exemption applies to common carrier’s tax/value added tax.
- The exemption also applies to percentage tax.
- The exemption operates for purposes of registration of tricycles.
Income thresholds for exemption
- The memorandum exempts tricycle operators from common carrier’s tax/value added tax when income is below PHP 550,000.00 under Section 109(2).
- The memorandum exempts tricycle operators from percentage tax when income is below PHP 100,000.00.
- The memorandum conditions the exemption on the income thresholds stated under Republic Act No. 7716 and Revenue Regulation No. 7-95.
- The exemption is applied to determine the registration tax requirements for tricycles.
Documentation requirement for registration
- The memorandum requires the BIR certificate of exemption for tricycle registration.
- The BIR certificate of exemption is accepted in lieu of proof of payment of common carrier’s tax/value added tax or percentage tax.
- The memorandum states the BIR certificate of exemption shall be required in view hereof.
- The memorandum directs compliance specifically for registration of tricycles.
Effect of compliance instruction
- The memorandum mandates strict compliance with the requirement to use the BIR certificate of exemption.
- The memorandum places the certificate requirement as the operative replacement for tax payment proof during tricycle registration.
- The memorandum is adopted on 19 March 1999 for immediate implementation upon issuance.