BIR Ruling No. 529-2020

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City

Certificate of Tax Exemption No. Se30-0529-2020

CERTIFICATE OF TAX EXEMPTION

issued to

CENTRAL SULU COLLEGE, INC. SEC Company Reg. No. TIN: Siasi, Sulu

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

2. Income derived from the operation of cafeterias/canteens, dormitories and 1. Tuition and Miscellaneous Fees; and bookstores located within its premises, owned and operated by CENTRAL SULU COLLEGE, 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 all other taxes not enumerated above.

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

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 SEP 2 2 2020

muane N

CAESAR R. DULAY

K-1 Commissioner of Internal Revenue 036744

O

CENTRAL SULU COLLEGE, INC. Page 2 of 3 Date issued CTE NO. -2 2

TERMS AND CONDITIONS OF HE CERTIFICATE OF TAX EXEMPTION

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

TAX EXEMPTION

1) INCOME TAX.CENTRAL SULU COLLEGE,INC.is exempt from the 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 forth under Revenue Memorandum Order (RMO) No 44-2016, to wit:

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

CENTRAL SULU COLLEGE, INC.'s interest income from currency bank 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%' tax under the expanded foreign currency deposit system imposed under Section 27(D)(1) of the National Internal Revenue Code of 1997, as amended, subject to

compliance with the conditions that as a tax-exempt institution it shall on an annual basis

submit to the Revenue District Office concerned an annual information return and duly

audited financial statement together with the following:

a Certification from their depository bank 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 C) Board Resolution by the school administration on proposed projects (i.e.. Certification of actual utilization of the said income; and 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

109(1)(H) of the National Internal Revenue Code of 1997, as amended, CENTRAL

SULU COLLEGE, INC.'s, gross receipts from operations as a non-stock, non-profit

educational institution are exempt from VAT. Moreover, revenues derived from assets

used in the operation of cafeterias/canteens, dormitories and bookstores located within the

premises of CENTRAL SULU COLLEGE, INC. are exempt from taxation provided

they are owned and operated by it as ancillary services.

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

CENTRAL SULU COLLEGE, INC. is subject to income tax on all its

income/receipts/revenues not expressly exempted and stated in the Certificate of Tax

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

under National Internal Revenue Code of 1997, as amended, on its income derived from

any of its properties, real or personal, or any activity conducted for profit, which income

should be returned for taxation, unless said revenues are actually, directly and exclusively

used for educational purposes.

Republic Act No. 10963 increased the tax rate from 7.5% to 15% effective Jan. 1,2018

Departinent Order No.149-95 dated November 24. 1995 amending Department Order No. 137-87

CENTRAL SULU COLLEGE, INC. Page 3 of 3 Date issued CTE No. SHyo - 0 5 2 9 - 2 0 2 8 SEP 2 2 2020

2) VALUE ADDED TAX/PERCENTAGE TAX If CENTRAL SULU COLLEGE, INC. is engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, its revenues derived therefrom shall be subject to the 12% VAT, 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.

Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or amended. 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

3)WITHHOLDING TAX CENTRAL SULU COLLEGE, INC. shall be constituted as withholding agent for the

government if it acts as an employer and its employees receive compensation income

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

1)CENTRAL SULU COLLEGE, 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

compliance with the conditions under which it has been granted tax exemptions or tax incentives shall be subject to examination by the BIR for purposes of ascertaining accounts and other pertinent records of tax-exempt organization or grantees of 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 199.. amended, to issue duly registered receipts or sales or commercial invoices for each sai 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 No. [RMC] No. 76-2003).

4) Finally, it is subject to the payment of registration fee of PhP 500.00 as prescribed in

Section 236(B) of the National Internal Revenue Code of 1997, as amended.

Republic Act No. 1963 increased the VAT threshold from P1,919,50000 to P3,0,000.00 effective Jan. 1,2018