How to Get a BIR Certificate of Tax Exemption in the Philippines

October 24, 2025

Taxes power public services, but not everyone or every organization in the Philippines is required to pay them in full. The BIR Certificate of Tax Exemption (CTE) is a critical document that formally recognizes certain individuals, nonprofits, and organizations as tax-exempt under Philippine law. It helps beneficiaries enjoy financial relief, demonstrate compliance, and operate legally without unnecessary tax burdens.

What Is a BIR Certificate of Tax Exemption?

A BIR Certificate of Tax Exemption (CTE) is an official document issued by the Bureau of Internal Revenue (BIR) confirming that an individual, organization, or business entity is wholly or partially exempt from specific taxes based on applicable Philippine tax laws.

The CTE verifies that a taxpayer’s status aligns with legal exemptions under the National Internal Revenue Code (NIRC) of 1997, as amended, and special laws granting tax privileges. For some entities, like cooperatives, charitable institutions, and certain educational or religious organizations, it offers vital proof to donors, investors, and regulators of compliance and legitimacy.

Primary Legal Basis

NIRC of 1997 (as amended by the TRAIN and CREATE Laws)
Republic Act No. 9520 – Cooperative Code of the Philippines
Revenue Memorandum Order (RMO) No. 38-2019 and its amendments
RMO No. 124-2022 – Guidelines on tax exemption for cooperatives and nonprofits

Essentially, the CTE ensures that qualified taxpayers enjoy benefits authorized by Philippine law, such as income tax exemptions, VAT exemptions, or relief from percentage taxes.

Who Can Apply for a BIR Certificate of Tax Exemption?

Eligibility depends on the entity’s classification, structure, and purpose. Generally, the following individuals and organizations may apply:

Individual Taxpayers

Certain individuals qualify automatically for exemption, but may still secure a certificate for documentation:

Minimum-wage earners or those earning below the taxable income threshold of PHP 250,000 annually, as per the TRAIN Law
Senior citizens receiving pensions under Republic Act No. 9994 (Expanded Senior Citizens Act)
Persons with Disabilities (PWDs) enjoying additional deductions under Republic Act No. 10754
Low-income individuals applying for scholarships or livelihood programs (requiring barangay certifications of low income or no income)

Corporations and Organizations

Legal and registered entities may also be eligible, provided they meet statutory conditions:

Non-stock, nonprofit corporations organized exclusively for religious, charitable, scientific, educational, or cultural purposes
Cooperatives registered under the Cooperative Development Authority (CDA)
Foundations and philanthropic institutions recognized as charitable entities
Microfinance organizations and non-governmental institutions
Educational institutions, especially nonprofit, proprietary schools meeting revenue use conditions
Government or multilateral entities recognized under treaties or national policies

Nonprofit applicants must ensure their income is used solely for their institutional purposes and not distributed to private stakeholders.

Tax Benefits Granted by the Certificate

The scope of exemption varies by taxpayer classification and legal framework:

Income Tax Exemption: Income derived from qualified activities is excluded from gross income computation.
Value-Added Tax (VAT) Relief: Some exempt entities may not charge or pay VAT under specific qualifying transactions.
Documentary Stamp Tax (DST) Exemption: Applies to certain cooperatives, LGU projects, and public nonprofit transactions.
Withholding Tax Relief: In some instances, payors are not required to withhold taxes on payments made to CTE holders.

Even with a CTE, entities are still expected to file informational returns, maintain proper accounting records, and regularly update their BIR registration.

Requirements for a BIR Certificate of Tax Exemption

Documentary requirements differ for each type of applicant. Below are the most common requirements based on BIR guidelines and RMOs:

For Individuals (Low-Income/No-Income Applications)

Certificate of low income or no income from the Barangay Chairperson
Notarized affidavit of no income or low income
Valid government-issued ID
Payment of certification fees: PHP 100 (Certification Fee) and PHP 30 (Documentary Stamp Tax)
Special Power of Attorney (SPA) if submitted by an authorized representative

For Cooperatives

(As per BIR RMO No. 124-2022)

Certified true copies of:
- Articles of Cooperation and By-laws (CDA-certified)
- CDA Certificate of Registration
- Certificate of Good Standing from CDA (valid on application date)
- BIR Certificate of Registration
Certification under oath listing cooperative members, TINs, and capital contributions
Latest audited financial statements
Proof of compliance with CDA and BIR filing requirements

For Non-Stock, Nonprofit Corporations

SEC registration certificate and Articles of Incorporation showing nonprofit purpose
Latest Audited Financial Statements (AFS)
Certifications proving operational activity related to charitable, educational, or religious purposes
Sworn statement of non-distribution of income and assets
Profile of board members and officers

How to Apply for a BIR Certificate of Tax Exemption

The application procedure varies slightly depending on the applicant’s classification, but the general steps are as follows:

Step 1: Determine Eligibility

Confirm your eligibility by reviewing BIR rulings or applicable revenue memoranda. Some applicants, especially nonprofits, may need legal verification to ensure compliance with the NIRC’s Section 30.

Step 2: Prepare the Documentation

Gather all required documents in both original and certified true copy format. Double-check completeness to prevent delays.

Step 3: File the Application at the Proper BIR Office

Applications are filed with the Revenue District Office (RDO), which has jurisdiction over the taxpayer’s registration. Submit the application form with all attachments, pay certification fees, and have your documents stamped “received.”

Step 4: BIR Evaluation and Verification

The BIR evaluates your application to confirm that your organization or income type qualifies for exemption. The process may include document validation, physical inspection, or clarification inquiries.

Step 5: Issuance of the Certificate

Once approved, the BIR issues your Certificate of Tax Exemption.
Processing time can vary depending on the RDO and complexity of the application, from several days for individuals to longer for organizations requiring in-depth evaluation.

Step 6: Renewal or Revalidation

CTEs are valid for three (3) years, unless stated otherwise. Certain entities, such as recognized nonprofit educational institutions, may have indefinite validity, subject to periodic review or major operational changes.

Responsibilities After Receiving a BIR Certificate of Tax Exemption

Holding a CTE does not mean the entity or individual is fully exempt from all tax-related obligations. Key responsibilities include:

Filing annual informational returns (BIR Form 1702Ex/1701A, as applicable)
Updating registration details in case of address or activity change
Maintaining books of accounts and issuing receipts when necessary
Renewing or revalidating the CTE before it expires
Submitting periodic reports requested by BIR examiners
Adhering to transparency standards, especially for donations and grants

Failure to comply can lead to revocation of tax-exempt status and potential penalties.

Timeline and Fees

Processing Time: Around 5 to 30 working days, depending on documentary completeness and applicant type.
Certification Fee: PHP 100
Documentary Stamp Tax: PHP 30 per certificate
Additional fees may apply for large organizations submitting multiple branch certifications.

Common Challenges and How to Avoid Them

Incomplete Documentation: Missing notarizations, outdated Good Standing Certificates, or unsigned financial statements are major causes of delay.
Ineligibility Due to Revenue-Generating Activities: Nonprofits must maintain strict separation between taxable and exempt income.
Late Renewal: CTE expirations can affect transaction eligibility for VAT exemptions and cooperative privileges.
Inconsistent Information: Mismatched records between BIR, SEC, and CDA trigger reevaluation or denial.

To avoid these pitfalls, maintain accurate and updated records and work with a consultant experienced in BIR processes..

Final Insights

Obtaining a BIR Certificate of Tax Exemption is essential for individuals and organizations that qualify for tax privileges under Philippine law. It formalizes your legal claim to exemption, establishes transparency, and ensures compliance while unlocking important financial advantages. With complex requirements and evolving regulations, working with trusted professionals like Triple i Consulting ensures that your application is handled accurately, efficiently, and in full accordance with BIR standards.

Is Assistance Available?

Yes. Navigating the complex procedures for securing or renewing a CTE can be confusing, especially for foreign-funded organizations, cooperatives, or small nonprofits unfamiliar with BIR protocols. Triple i Consulting provides expert assistance in:

Evaluating eligibility and preparing documentary requirements
Liaising with the BIR and ensuring correct submissions to your RDO
Addressing BIR comments or requests for clarification
Managing renewal applications and ongoing compliance with tax reporting standards
Assisting in the legal interpretation of exemptions under Philippine tax law.

Contact our team today for professional guidance on acquiring, renewing, or managing your BIR tax exemption certificate: