BIR Ruling No. 487-2021

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

Certificate of Tax Exemption No. 5+130-481-2822

CERTIFICATE OF TAX EXEMPTION

issued to

No. 45, 7th Street, New Manila, 11 12 Ouezon City, Philippines SEC Company Reg. No. SALVATORIAN SCHOOL, INC. TIN:

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

2c 4 SALVATORIAN SCHOOL, INC. to be actually, directly and exclusively Tuition fees and other miscellaneous school fees; Scholarship grants; Income derived from the operation of cafeterias/canteens, dormitories and bookstores located within its premises, owned and operated by used for educational purposes. Donations; and

nothing follows

integral part hereof. It is liabie, however. to all other taxes not enumerated above. 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

character. purpose or method of operation of the corporation which are inconsistent with the basis for its income tax exemption. 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 This certification shall be valid from the date of issuance until revoked by this Office

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

Issued this day of...EC?:21

Me eesaMy

K1-FR-19-1468 Commissioner of Internal Revenue CAESAR R. DULAY 047974

SALVATORIAN SCHOOL, INC Page 2 of 4 Date Issued: LIF No.+ 3t.+ 3 HEC 1

Under Section 30 (H) of the National Internal Revenue Code of 1997, as amended For Non-Stock. Non-Profit Educational Institution OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

TAX EXEMPTION

1) INCOME TAX

SALVATORIAN SCHOOL 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:

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

an educational institution, are exempt from the 20% final tax and 1 5%' tax on interest income under deposit substitute instruments used actually, directly and exclusively in pursuance of its purpose as the expanded foreign currency deposit system imposed under Section 27 (D) (1) of the National Internat Revenue Code of 1997, as amended. subject to compliance with the conditions that as a tax-exempt educational institution it shali on an annual basis submit to the Revenue District Office concerned an annual information return and duly audited financial statement together with the SALVATORIAN SCHOOL, INC.'s interest income from currency bank deposits and yield from following:

a) Certification from their depository banks as to the amount of interest income of 1997, as amended; 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 Secrion 27 (D) (1) of the National Internal Revenue Code

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 banks or placed in money miarkets, on or before the I5th day of the fourth month following the end of its taxable year (Sec. 4, Finance Department Order of equipment, books and the like) to be funded out of the money deposited in No. 137-87)

2} VALUE-ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to Section activities. are exempt from VAT. Moreover, revenues derived from assets use in the operation of SCHOOL, INC., are exempt from taxation provided they are owned and operated by it as ancillary SCHOOL. INC.'s gross receipts from operations as a non-stock. non-profit educational institution cafeterias/canteens, dormitories and bookstores located within the premises of SALVATORIAN 109(1)(H) of the National Internal Revenue Code of 1997, as amended. SALVATORIAN

0

Department Order No 149.95 dated November 24 : 395 amerding Depart:rent Order No : 37 37 Repubhc A Act No.1063 Pctrie.fnudry ! :o

SALVATORIAN S CHOOL, INC. Page 3 of 4 Date Issued: t.TE No. S if 3

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

to the corresponding internal revenue taxes imposed under the National Interna! Revenue Code of SALVATORIAN SCHOOL, 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 actually, directly and exclusively used for educational purposes. conducted for profit, which income shouid be returned for taxation. unless said revenues are 1997, as amended, on its income derived from any of its properties, real or personal, or any activity

2) VALUE-ADDED TAX (VAT)/PERCENTAGE TAX

(P3,000,000.003) or to the 3% percentage tax, if gross receipts do not exceed P3,000,000.00. a business pursuit, including transactions incidental thereto, its revenues derived therefrom shali be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos If SALVATORIAN SCHOOL, INC. is engaged in the sale of goods or services in the course of

services and importation of goods shall nevertheless be subject to the l2% VAT pursuant to Sections 106, 107, and 108 of the National Internai Revenue Code of 1997, as amended. Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or properties.

3) WITHHOLDING TAX

tax under Section 79 (A), Chapter X11I, Title HI of the National Internal Revenue Code of 1997, as SALVATORIAN SCHOOL INC. shali be constituted as withholding agent for the government if it acts as an employer and its employees receive compensation income subject to the withholding amended, as impiemented by Revenue Regulations No. 2-98, as amended, or if it makes income No. 2-98, as amended. Nationai Internal Revenue Code of 1997, as amended, and as implemented by Revenue Regulations payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the

TAXPAYER DUTIES & RESPONSIBILITIES

l) The Board of Trustees of SALVATORIAN SCHOOL, INC. shall not approve the payment of

compensation or honorarium to the members of the Board. The giving of compensation, honorarium or reasonable per diem is a form of private inurement which the law prohibits in the organization

in accordance with the By-Laws of the Corporation, such per diem must be subject to proper person. While the trustees may receive reasonable per diem to subsidize their transportation expense liquidation, otherwise, it shall disqualify the Corporation from the availment of the tax exemption under Section 30 of the National Internal Revenue Code of 1997, as amended (DOF Opinion No. 005-2019 dated January 29. 2019). and operation of a non-stock, non-profit corporations. This act violates the requirement that no part of the net income or assets of the corporation shall inure to the benefit of any individual or specific

2) SALVATORIAN SCHOOL,INC. is required to file on or before the I 5th day of the fourth month income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return. following the end of the accounting period a Profit and Loss Statement and Balance Sheet with 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 wetl as sources and disposition of Annual Information Return under oath, stating its gross income and expenses incurred during the

1 CIR vs. St. Luke's Medical Center. tnc.. G R. Nos 99909 ara 19 .910 cated September 76, 2012 Republic Act No.10963ncreased the VAI threshold from n P 919.c00.30) to #3,000.003.0O e*fectve !anuarv IH01d

SALVATORIAN SCHOOL, INC. Page 4 of 4 CIE No. SH 3C Date issued: ...ij-t

3) 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 it has been granted tax exemptions or tax incentives, and its tax liabilities, if any. examination by the BIR for purposes of ascertaining compliance with the conditions under which

4) 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 corporation is registered. (Revenue Memorandum Circular

5)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.