The compliance with the documentation for the exemption will render Near Eastern University exempt from final withholding tax on the interest income. S2: Even without the documentation, the interest income is still exempt from final tax pursuant to the provision of the Philippine Constitution, if it can be shown that the income was used actually, directly, and exclusively for the purpose for which the corporation was organized.
2.
Facts: Near Eastern University, a non-stock, non-profit educational corporation, earned interest income on its bank deposits in Banko De Pelepens, on which its information return filed with the Bureau of Internal Revenue carried the item, there is a certification from the depository bank of the amount of the interest on which there was no final withholding tax; and there is a certification from the corporation on the utilization of the income to which it is intended.
S1: The compliance with the documentation for the exemption will render Near Eastern University exempt from final withholding tax on the interest income.
S2: Even without the documentation, the interest income is still exempt from final tax pursuant to the provision of the Philippine Constitution, if it can be shown that the income was used actually, directly, and exclusively for the purpose for which the corporation was organized.
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