Tax exemption of Bangko Sentral ng Pilipinas

(Revenue Regulations No. 2-2020, January 15, 2020)

This Tax Alert is issued to inform all concerned of the tax exemption privileges of the Bangko Sentral ng Pilipinas (BSP) under The New Central Bank Act of 2019 (RA 11211), as implemented by RR 2-2020.

RR No. 02-2020 provides that the BSP shall be exempt from all national internal revenue taxes on income derived from its governmental functions, specifically:

  1. Income from its activities or transactions in the exercise of its supervision over bank operations and its regulatory and examination power over non-bank financial institutions performing quasi-banking functions, money service businesses, credit granting businesses and payment system operators; and
  2. Income in pursuit of its primary objective to maintain price stability conducive to a balanced and sustainable growth of the economy, and the promotion and maintenance of monetary and financial stability and the convertibility of peso.

All other income not included in the list above shall be considered as proprietary income, hence, subject to all applicable national internal revenue taxes.

The law became effective on March 21, 2019.  This RR will become effective beginning Jan 31, 2020.