Implementing the Tax Neutrality Provision of Republic Act No. 11439, Otherwise Known as "An Act Providing for the Regulation and Organization of Islamic Banks"

June 22, 2020REVENUE REGULATIONS NO. 17-20SUBJECT : Implementing the Tax Neutrality Provision of Republic Act No. 11439, Otherwise Known as "An Act Providing for the Regulation and Organization of Islamic Banks"   TO : All Internal Revenue Officers and Others Concerned SECTION 1. Scope. — Pursuant to Section 244 of the National Internal Revenue Code, as amended, these Regulations are hereby promulgated to implement Section 14 of Republic Act No. 11439 which mandates a neutral tax treatment between Islamic banking transactions and equivalent conventional banking transactions within the provisions of the National Internal Revenue Code of 1997 (NIRC), as amended. aScITESECTION 2. Coverage. — These Regulations cover transactions of Islamic banks, either domestic or foreign, and Islamic Banking Units (IBU) in the form of a division, department, office, or branch of a conventional bank that are authorized to conduct business in accordance with the principles of Shari'ah pursuant to the guidelines prescribed by the Bangko Sentral ng Pilipinas.SECTION 3. Tax Neutrality. — Islamic banking transactions must have a parity of tax treatment of equivalent conventional banking...