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How Nonprofit and Religious Organizations Renew Their BIR Certificate of Tax Exemption (RMO No. 38-2019)

·7 mins
Guides BIR BIR Compliance Income Tax Philippines

A BIR Certificate of Tax Exemption (CTE) issued to a qualified Section 30 non-stock, non-profit or religious organization is valid for three (3) years from its date of issue, and must be renewed before it expires or the organization risks losing its ability to secure BIR tax clearances. Revenue Memorandum Order (RMO) No. 38-2019 sets out the current guidelines for both the original application and the renewal of this certificate. This guide walks through what the CTE covers, how long it lasts, the renewal timeline and documents, and which nonprofit categories follow a different rule entirely.

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What RMO No. 38-2019 Covers #

Revenue Memorandum Order No. 38-2019, issued July 24, 2019, prescribes the updated policies and procedures for processing applications for a BIR Certificate of Tax Exemption filed by corporations and associations claiming exemption under Section 30 of the National Internal Revenue Code (NIRC). Section 30 covers non-stock, non-profit organizations such as charitable institutions, religious organizations, civic leagues, and similar entities organized and operated exclusively for the purposes the NIRC lists — not for profit distribution to members. The CTE is the document these organizations use to prove to the BIR, and to third parties, that their income tax exemption has been confirmed following the RMO’s review process.

The order applies specifically to qualified Section 30 corporations. It does not change the separate rules that already exist for a handful of other nonprofit-adjacent categories, which are covered in the exceptions section below.

How Long a CTE Is Valid #

A Certificate of Tax Exemption issued under RMO No. 38-2019 to a qualified Section 30 organization is valid for three (3) years from the date it was issued, unless the BIR revokes or cancels it earlier for cause. This is a fixed-term certificate, not a permanent status — the three-year clock runs regardless of whether anything about the organization has changed, and the organization is responsible for tracking its own expiration date rather than waiting for a BIR reminder.

Because the exemption itself is not automatically re-verified after three years, an organization that lets its CTE lapse is treated, for practical purposes, as an organization whose exempt status has not been recently confirmed — even if nothing about its actual activities has changed. That is the gap the renewal process under RMO No. 38-2019 (July 24, 2019) is designed to close.

How to Renew (Worked Example) #

Renewal under RMO No. 38-2019 follows substantially the same process as the original application: the organization files with its Revenue District Office (RDO) at least 30 days before the CTE expires, submits an updated dossier plus its latest audited financial statements, and waits for RDO pre-evaluation and Revenue Region endorsement before a new 3-year certificate is issued. A concrete example makes the timeline easier to apply.

Grace Community Foundation is a Section 30 non-stock, non-profit organization. It received its BIR Certificate of Tax Exemption on August 1, 2023, valid until August 1, 2026. Here is how its bookkeeper should handle the renewal:

  1. Calendar the deadline early. Mark early July 2026 — at least 30 days before the August 1, 2026 expiration — as the filing target, not the expiration date itself.
  2. Assemble the renewal dossier. Gather substantially the same core documents required for the original application (SEC registration, Articles of Incorporation/By-laws, and proof of the organization’s continuing non-stock, non-profit character), plus documents specific to renewal: the foundation’s latest Audited Financial Statements and a program accomplishment report covering the period since the last certificate was issued.
  3. File with the RDO of registration. Submit the renewal application and dossier to the RDO where Grace Community Foundation is registered — the same venue that handles the original application.
  4. RDO pre-evaluation and endorsement. The RDO reviews the documents for completeness and, if the organization still qualifies, prepares the certificate and an accompanying memorandum, endorsing the package to the Revenue Region.
  5. Regional Director approval. Once the Revenue Region approves, a new Certificate of Tax Exemption is issued, valid for another three years — in this case, through 2029.

Filing in early July, rather than waiting until the last days of July, gives the RDO time to complete pre-evaluation before the existing certificate’s August 1 expiration.

Exceptions: Categories That Don’t Follow the 3-Year Rule #

Not every nonprofit-adjacent entity follows the RMO No. 38-2019 three-year renewal clock — several categories are governed by their own, separate BIR frameworks, and applying the Section 30 timeline to them is a common mistake. These include:

  • Non-stock, non-profit educational institutions — these follow the separate regime under RMO No. 44-2016 rather than RMO No. 38-2019.
  • Homeowners’ associations — governed by Republic Act No. 9904 (the Magna Carta for Homeowners and Homeowners’ Associations) and related BIR issuances, not the Section 30 CTE renewal cycle.
  • Non-stock savings and loan associations — follow Republic Act No. 8367, a separate statutory framework from Section 30.
  • Employees’ retirement benefit plans — governed by Republic Act No. 4917 and, more recently, updated BIR guidance on retirement plan qualification (see this site’s post on the RR No. 15-2025 retirement plan rules for that separate regime).

Certificates in these carve-out categories generally remain effective unless the BIR affirmatively revokes them, rather than expiring on a fixed three-year schedule the way a Section 30 CTE does under RMO No. 38-2019.

Returning to the worked example: a Catholic parish school located near Grace Community Foundation is also non-stock and non-profit, but because it operates as an educational institution, it falls under RMO No. 44-2016, not RMO No. 38-2019. Its administrators should not assume the same three-year renewal countdown applies — a different set of procedures and timing governs its certificate.

What Happens If You Miss the Renewal Window #

Missing the renewal window does not automatically strip a Section 30 organization of its tax-exempt status outright, but it does create practical exposure: the BIR will not issue tax clearances to an organization whose CTE has lapsed, and an expired certificate invites closer administrative scrutiny. For an organization that regularly needs to demonstrate compliance — to grantors, government partners, or in connection with its own filings — an expired CTE can function as a real operational obstacle even before any formal revocation occurs.

The safer practice is treating the CTE renewal deadline the same way an organization treats a tax filing deadline: calendared well in advance, with the dossier assembled early rather than gathered in a rush during the final week before expiration.

Section 30 organizations are one of several categories of Philippine entities that can qualify for BIR income tax exemption under different legal bases. If your organization is a micro business rather than a non-stock nonprofit, see BMBE Registration and BIR Income Tax Exemption: Who Qualifies Under RA 9178 for the exemption available to Barangay Micro Business Enterprises. Cooperatives follow yet another framework — see Are Cooperatives Exempt From BIR Income Tax and VAT? Requirements Under RA 9520 for how that exemption works and where it overlaps with, and differs from, the Section 30 CTE process described here.

Summary #

A BIR Certificate of Tax Exemption issued to a qualified Section 30 non-stock, non-profit or religious organization under RMO No. 38-2019 is valid for three years and must be renewed at least 30 days before it expires, using substantially the same dossier as the original application plus updated audited financial statements and a program accomplishment report. Filing goes through the organization’s RDO, which pre-evaluates and endorses the renewal to the Revenue Region for approval. Non-stock educational institutions, homeowners’ associations, non-stock savings and loan associations, and employees’ retirement benefit plans follow separate rules and do not run on this same three-year clock — organizations in those categories should confirm which framework actually applies to them before assuming RMO No. 38-2019 governs their certificate.