How to Claim Education Tax Incentives for Filipino SMBs
Complete guide to BIR tax incentives under RMC 23-2026 for education partnerships, including RA 8525, RA 12063, and the 150% tax deduction
What you'll learn in this RMC 23-2026 education tax incentives guide
This complete guide to BIR education tax incentives for Filipino SMBs explains RMC 23-2026, the simplified process for claiming tax perks under the Adopt-a-School Act (RA 8525) and EBET Framework Act (RA 12063), including the 150% tax deduction for training expenses.
For related tax compliance guidance, also see our BIR Business Registration Guide, BIR Letter of Authority (LOA) Guide, and AFS Requirements Guide.
What Is RMC No. 23-2026?
Issued in March/April 2026, RMC No. 23-2026 is a Revenue Memorandum Circular that clarifies the rules under Revenue Regulations No. 13-2025. Stakeholders — including many SMB owners — raised concerns about confusing requirements and process gaps, so the BIR responded with clearer, more streamlined guidelines covering the accreditation, certification, and reporting processes for claiming tax perks.
In plain terms: the BIR updated the rulebook to make it less of a headache for businesses like yours to claim the BIR tax incentives you are already entitled to.
— BIR Commissioner Charlito Martin Mendoza
What RMC 23-2026 Specifically Addresses
| Area | What Changed |
|---|---|
| Accreditation & Certification | Clearer step-by-step rules on how to get certified by DepEd, TESDA, or relevant agencies |
| Documentary Requirements | Simplified and defined list of documents needed for availment |
| Compliance & Reporting | Streamlined ongoing reporting obligations for participating businesses |
| Administrative Burden | Removes ambiguities and reduces back-and-forth with the BIR |
Which Laws Give You These Tax Breaks?
RA 8525
Adopt-a-School Act of 1998
Allows businesses to claim deductions for donations to public schools, including additional deductions on top of the actual donation amount.
RA 12063
EBET Framework Act
Covers industry-based skills training, apprenticeship, and dual training programs with tax incentives.
Tax Code
Relevant Provisions
Additional deductions tied to workforce development contributions and education partnerships.
RMC 23-2026 specifically applies to partnerships under RA 8525 and RA 12063, and now makes accessing these benefits clearer and faster for Filipino SMBs of all sizes.
Step-by-Step Guide: How to Claim Your BIR Education Tax Incentive
Determine If Your Activity Qualifies
Check whether your planned or existing partnership involves education or skills training — such as donating school supplies, funding scholarships, sponsoring apprenticeship programs, or running enterprise-based training. The activity must fall under the Adopt-a-School Act, the EBET Framework Act, or related Tax Code provisions.
Secure Accreditation or Certification
RMC 23-2026 provides clearer rules on the accreditation and certification process. Depending on your program type, you may need accreditation from:
Department of Education (DepEd)
For school-based partnerships
TESDA
For technical-vocational and skills training programs
Prepare Your Documentary Requirements
One of the biggest improvements under RMC 23-2026 is the clearer list of required documents for BIR tax incentive availment. While exact requirements depend on your program, you will generally need:
- BIR Certificate of Registration (COR)
- Signed education partnership or training agreement
- Official receipts or invoices of expenses incurred
- Accreditation or certification from the relevant agency
- Notarized deed of donation or training agreement (where applicable)
Prepare these documents before filing to avoid unnecessary delays.
File Your Application with the BIR
Submit your complete documentary requirements to your registered Revenue District Office (RDO). The circular has streamlined this submission process to reduce back-and-forth between businesses and the BIR.
Claim the Incentive in Your Tax Return
Once your application is processed and approved, claim the applicable tax deduction in your Annual Income Tax Return (ITR). Ensure your bookkeeper or accountant:
- Records the contribution correctly in your books of account
- Attaches all supporting documents to your return
- Keeps copies on file for at least ten (10) years in case of a BIR audit
Comply with Reporting Requirements
RMC 23-2026 also clarifies the ongoing compliance and reporting process for businesses availing of these incentives. You may be required to submit periodic reports to the BIR or partner agencies showing how funds were used and what educational outcomes were achieved.
How Much Can You Actually Save? The 50% Additional Deduction Explained
Under RMC 23-2026, enterprises implementing EBET programs can claim an additional 50% deduction on top of their actual training expenses — meaning a total deductible amount of 150% of what you actually spent. This enhanced rate is valid until December 31, 2027.
Sample Tax Savings Calculation
Scenario: Your company spends ₱1,000,000 on directly incurred training allowances and assessment fees for apprentices.
| Item | Calculation | Amount |
|---|---|---|
| Actual Expense (100%) | Regular allowable deduction | ₱1,000,000 |
| Additional Incentive (50%) | Incentive under RMC 23-2026 | ₱500,000 |
| Total Deductible Expense | ₱1,500,000 | |
Tax Savings Impact: Assuming a 25% Corporate Income Tax (CIT) rate, the additional ₱500,000 deduction results in immediate tax savings of ₱125,000 (₱500,000 × 25%) beyond what the regular deduction gives you.
What Happens After 2027?
Effective January 1, 2028, the additional deduction rate increases to 75% of actual training expenses — but it will then be subject to a cap of whichever is lower: 5% of total direct labor expenses, or ₱25,000,000 per year. Plan ahead: if your training spend is significant, take maximum advantage of the uncapped 50% rate before end of 2027.
Requirements and Important Rules to Know
Eligibility Requirements
- TESDA Registration — Enterprises implementing EBET programs must be registered with TESDA before claiming incentives
- Eligible Expenses Only — Only expenses actually incurred and paid by your enterprise qualify, such as training allowances and assessment costs
- No Third-Party Funded Costs — Expenses covered by scholarships, subsidies, or third-party funding cannot be claimed
- No Double-Claiming — You may only claim one type of incentive per specific expense; you cannot claim the same cost under both the Adopt-a-School Program and the EBET Act
- No Carryover — Unused deductions for a taxable year are forfeited and cannot be carried forward to the next year
Important: Make sure your TESDA registration is in order before incurring training expenses. Retroactive registration will not qualify past expenses for the incentive.
Compliance Checklist for Filipino SMBs
Before submitting, run through this list:
- Confirmed your activity qualifies under the Adopt-a-School Act, EBET Framework Act, or Tax Code
- Registered with TESDA (required for EBET incentives)
- Obtained accreditation or certification from DepEd, TESDA, or the relevant agency
- Gathered all required documents (COR, partnership agreement, receipts, certifications)
- Documents notarized where required
- Verified expenses are directly incurred and paid by your enterprise (no third-party funded costs)
- Confirmed no double-claiming across Adopt-a-School and EBET for the same expense
- Complete package submitted to your registered RDO
- Tax incentive properly reflected in your books and ITR
- Reporting schedule identified and noted in your compliance calendar
Why This Matters for Your SMB
For small and medium Filipino businesses, every peso saved on taxes is a peso that can be reinvested in operations, people, or growth. The BIR's new circular removes the bureaucratic complexity that previously discouraged many SMBs from pursuing these incentives.
Beyond the savings, participating in education partnerships builds community goodwill and contributes to developing the skilled workforce your industry depends on.
SMB Tip: You do not need to be a large corporation to qualify. The Adopt-a-School Act and related programs were designed to include private sector partners of all sizes. Even a modest donation to a public school in your barangay may count — as long as you follow the correct documentation and certification steps under RMC 23-2026.
Frequently Asked Questions
Do I need to be a corporation to qualify?
No. Sole proprietors and partnerships registered with the BIR may also be eligible, provided they meet the requirements of the applicable law.
How much can I deduct?
Under the EBET Act (via RMC 23-2026), your business can deduct 150% of actual training expenses — the standard 100% plus an additional 50% incentive deduction. This rate applies until December 31, 2027, after which it increases to 75% additional deduction but becomes subject to a cap. For Adopt-a-School donations, a similar additional deduction applies. Consult your accountant for the exact rates applicable to your situation.
Where can I get the official text of RMC 23-2026?
The full text is available on the BIR's official website at bir.gov.ph under the Issuances section. You may also request a copy from your local RDO.
What if I already have an existing education partnership?
Existing arrangements may need to be re-evaluated against the updated documentary and reporting requirements under RMC 23-2026. Review your setup with your accountant to ensure continued compliance.
Conclusion
RMC No. 23-2026 is a genuine win for Filipino SMBs. It takes a valuable but previously confusing set of BIR tax incentives for education and makes them accessible with clearer rules, simpler requirements, and a more straightforward process from start to finish.
If your business has been on the sidelines of Philippine education partnerships because the process seemed too complex — now is the time to revisit that decision.