BIR Ruling No. 451-2020

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No.

SH30-0451-2020

CERTIFICATE OF TAX EXEMPTION

issued to

SAINT JOSEPH FREINADEMETZSCHOOL INC.

Brgy. Tigbao, Tacloban City, Layte 6500

SEC Company Reg. No. TIN:

This certifies that the above-named corporation is a non-stock, non-profit corporation and has proven by actual operation that its primary purpose is one of those'enumerated under Section 30(H) of the National Internal Revenue Code of 1997, as amended. It is exempt from INCOME TAX only on the following revenues or receipts:

1.Tuition fees, miscellaneous revenues and other school fees;

2. Donations and contributions; and 3. Income derived from the operation of cafeterias/canteens, dormitories and

bookstores located within its premises, owned and operated by SAINT

JOSEPH FREINADEMETZ SCHOOL INC.,to be actually, directly and

exclusively used for educational purposes.

nothing follows

subject to the provisions of applicable BIR rules and regulations and the tax exemptions.

liabilities and responsibilities stated in the Terms and Conditions hereto attached and made an

integral part hereof. It is liable, however, to ail other taxes not enumerated above.

This certification shall be valid from the date of issuance until revoked by this Office

for violation of any provisions of applicable rules and regulations of the BIR, or the terms and

conditions herein set forth. It shall likewise be revoked if there are material changes in the

character, purpose or method of operation of the corporation which are inconsistent with the

basis for its income tax exemption.

This Certificate of Tax Exemption is being issued on the basis of the facts and

documents as represented and submitted. However, if upon investigation, the BIR ascertains

that the facts are different, then this Certificate shall be considered null and void.

Issued this day of . AUG 1 7 2020

1e3

CAESAR R.DULAY

Commissioner of Internal Revenue

K- 036368 k

Saint Joseph Freinademetz School Inc. Page 2 of 3 CTE No. SH 30 - 0 45 1 - 2 0 2 0 Date issued_AUG 1 7 2020

TERMS AND CONDITIONS

OF THE CERTIFICATE OF TAX EXEMPTION

under Section 30(H) of the National Internal Revenue Code of 1997, as Amended For Non-Stock, Non-Profit Educational Institution

TAX EXEMPTION

1) INCOME TAX. SAINT JOSEPH FREINADEMETZ SCHOOL INC.is exempt from the forth under Revenue Memorandum Order (RMO) No 44-2016, to wit: payment of income tax only on revenues and receipts enumerated 'on the Certificate of Tax Exemption. It is understood that the school must continue to meet the following requisites as set

ii. Its revenues are actually, directly and exclusively used for educational purposes. It is a non-stock, non-profit educational institution; and

tax on interest income under the expanded foreign currency deposit system imposed under Section deposits and yield from deposit substitute instruments used actually, directly and exclusively in pursuance of its purpose as an educational institution, are exempt from the 20% final tax and 15%1 Revenue District Office concerned an annual information return and duly audited financial statement together with the following: SAINT JOSEPH"FREINADEMETZ SCHOOL INC.'s interest income from currency bank 27 (D) (1) of the National Internal Revenue Code of 1997, as amended, subject to compliance with the conditions that as a tax-exempt educational institution it shall on an annual basis submit to the

(a) Certification from their depository banks as to the amount of interest

income earned from passive investment not subject to the 20% final withholding tax and 15% tax on interest income under the expanded foreign currency deposit system imposed by Section 27 (D) (1) of the National Internal Revenue Code of 1997, as amended;

(b) Certification of actual utilization of the said income; and

(c)Board Resolution by the school administration on proposed projects (i.e.

construction and/or improvement of school buildings and facilities. acquisition of equipment, books and the like) to be funded out of the money deposited in banks or placed in money markets, on or before the 15th day of the fourth month following the end of its taxable year (Sec. 4, Finance Department Order No. 137-87).

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to Section

FREINADEMETZ SCHOOL INC.'s gross receipts from operations as a non-stock, non-profit 109(1)(H) of the National Internal Revenue Code of 1997, as amended, SAINT JOSEPH

educational institution is exempt from VAT. Moreover, revenues derived from assets used in the

operation of cafeterias/canteens, dormitories and bookstores located within the premises of SAINT JOSEPH FREINADEMETZ SCHOOL INC.are exempt from taxation provided they are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

1INCOME TAX

income/receipts/revenues not expressly exempted and stated in the Certificate of Tax SAINT JOSEPH FREINADEMETZ SCHOOL INC.is subject to income tax on all its

O

Republic Act No.10963 increased e tax rate from 7.5% to 15% effective January 1,2018 Department Order No.149-95 dated November 24,1995 amending Department Order No.137-87.

Saint Joseph Freinademetz School Inc. Page 3 of 3 CTENo.SH360 4-51-2020 Date issued AUG 1 7 2020

Exemption. Moreover, it is subject to the corresponding internal revenue taxes imposed under the

properties, real or personal, or any activity conducted for profit, which income should be returned National Internal Revenue Code of 1997, as amended, on its income derived from any of its for taxation, unless said revenues are actually, directly and exclusively used for educational

purposes.

2) VALUE ADDED TAX/PERCENTAGE TAX

If SAINT JOSEPH FREINADEMETZ SCHOOL INC. is engaged in the sale of goods or

derived therefrom shall be subject to the 12% V AT, in case the gross receipts from such sales exceed Three Million Pesos (P3,000,000.00)3, or to the 3% percentage tax, if gross receipts do not exceed P3,000,000.00 services in the course of a business pursuit, including transactions incidental thereto, its revenues

Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or properties or services and importation of goods shall nevertheless be subject to the 12% VAT pursuant to Sections 106 and 107 of the National Internal Revenue Code of 1997, as amended.

3)WITHHOLDING TAX

SAINT JOSEPH FREINADEMETZ SCHOOL INC. shall be constituted as withholding agent for the government if it acts as an employer and its employees receive compensation income subject

Code of 1997, as amended, as implemented by Revenue Regulations No. 2-98, as amended, or if it to the withholding tax under Section 79 (A), Chapter XIII, Title II of the National Internal Revenue

makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the National Internal Revenue Code of 1997, as amended, and as implemented by Revenue Regulations No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

SAINT JOSEPH FREINADEMETZ SCHOOL INC.is required to file on or before the 15th

day of the fourth month following the end of the accounting period a Profit and Loss Statement and Balance Sheet with the Annual Information Return under oath, stating its gross income and expenses incurred during the preceding period and a certificate showing that there has not been any change in its By-laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return.

2)Under Section 235 of the National Internal Revenue Code of 1997,as amended, any provision of

existing general and special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organization or grantees of tax incentives shall be subject to examination by the BIR for purposes of ascertaining compliance with the conditions under which it has been granted tax exemptions or tax incentives, and its tax liabilities, if any.

3)Further, it is also required under Section 6(C) in relation to Section 237 of the National Internal Revenue Code of 1997, as amended, to issue duly registered receipts or sales or commercial

No. [RMC] No. 76-2003). invoices for each sale or transfer of merchandise or for services rendered which are not directly related to the activities for which the Association is registered. (Revenue Memorandum Circular

4)Finally, it is subject to the payment of registration fee of PhP500.00 as prescribed in Section 236(B) of the National Internal Revenue Code of 1997, as amended.

3 RA No. 10963 increased the VAT threshold from P1,919,500 to P3,00,000 effective January 1, 2018.