RR 3-2022

Revenue Regulations No. 3-2022, issued on April 8, 2022, implements Republic Act No. 11635, which amended Section 27(B) of the NIRC of 1997 on the income taxation of proprietary educational institutions and hospitals which are non-profit. The preferential 10% corporate income tax rate covers proprietary educational institutions, non-profit hospitals, and non-stock, non-profit educational institutions whose net income or assets accrue to or benefit any member or specific person; however, a 1% rate applies beginning July 1, 2020 until June 30, 2023, after which the rate reverts to 10%. The 25% regular corporate income tax rate applies on the entire taxable income of covered institutions if their gross income from unrelated trade, business or other activity exceeds 50% of total gross income from all sources, and on the portion of a non-stock, non-profit educational institution's revenues or assets not used actually, directly, and exclusively for educational purposes.