Government exempts seafarers’ groups from tax, duties

Government exempts seafarers’ groups from tax, duties
Reine Juvierre S. Alberto May 1, 2025 https://businessmirror.com.ph/2025/05/01/government-exempts-seafarers-gr...

THE income and properties of seafarers’ legitimate labor organizations are now exempted from taxes and duties under the Magna Carta of Filipino Seafarers, according to the Bureau of Internal Revenue (BIR).

This was after Internal Revenue Commissioner Romeo D. Lumagui Jr. issued Revenue Memorandum Circular (RMC) 22-2025, which amended certain portions of Revenue Memorandum Order 38-2019, providing tax exemptions to legitimate labor organizations of seafarers.

“Income and the properties of a legitimate labor organization of seafarers, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments,” the RMC read.

However, labor organizations of seafarers are still subject to limitations, such as value-added tax (VAT), percentage tax liabilities and obligations as withholding agents.

This comes after the passage of Republic Act 12021 (Magna Carta of Filipino Seafarers) to exempt legitimate labor organizations of seafarers from taxes, duties and other assessments without the need to apply for confirmation.

These organizations now only need to register as a taxpayer at the Revenue District Office that has jurisdiction over their place of business.

They are no longer required to apply for a Certificate of Tax Exemption to enjoy tax benefits under the Labor Code, the Magna Carta of Filipino Seafarers and the Tax Code, but they must submit documents upon registration.

These include their Articles of Incorporation and By-Laws issued by the Securities and Exchange Commission (SEC) stating these organizations are a non-stock, non-profit entity and a sworn certification detailing their activities, income sources and compensation structure.

They must also provide a Department of Labor and Employment (Dole) certification proving their legitimacy within 60 days from the effectivity of RA 12021.

“The availment of the said tax exemptions shall be without prejudice to the conduct of post-audit investigation and/or investigation by concerned RDO having jurisdiction over their principal place of business,” according to the BIR.

To maintain their tax-exempt status, the organizations must submit an updated certified true copy certification from Dole, proving they remain registered when filing their Annual Income Tax Return.

“Noncompliance herewith shall be subjected to penalties under pertinent laws and revenue issuances,” the BIR warned.

The implementing rules and regulations of the Magna Carta of Filipino Seafarers were signed on January 8, 2025, after it was signed into law in 2024.

The law aims to strengthen the protection of Filipino seafarers and address the critical issues faced by the seafarers, such as improved working conditions, right to organize, fair treatment in maritime accidents and freedom from discrimination.