BIR Ruling No. 965-2018

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

Certificate of Tax Exemption No. 965-2018

CERTIFICATE OF TAX EXEMPTION issued to

SAN ISIDRO LABRADOR CATHOLIC SCHOOL Philand Drive Pasong Tamo Tandang Sora Quezon City SEC Company Reg. No. OF QUEZON CITY INC. TIN:

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

1. Tuition fees and Other school fees; and Income derived from the operation of cafeterias/canteens, dormitories and bookstores located within its premises, owned and operated by SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY, INC., to be actually, directly and exclusively used for educationai purposes. *

nothing follow

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.

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 for violation of any provisions of applicable rules and regulations of the BIR, or the terms and basis for its income tax exemption. 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 ofMAY 2 4 20!8

Aa

CAESAR R. DULAY

K-1-JAC Commissioner of Internal Revenue 016.836

San Isidro Labrador Catholic Schoot of Quezon City, Inc. Page 2 of 3 Date issued_MAY 2 42018 CTE No. 965-2018

OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

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. SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY. 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:

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

the 20% final tax and i5%' tax on interest income under the expanded foreign currency deposit system imposed under Section 27 (D) (1) of the National Internal Revenue Code of 1997, as return and duly audited financial statement together with the following: SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY INC.'s interest directly and exclusively in pursuance of its purpose as an educational institution, are exempt from amended, subject to compliance with the conditions that as a tax-exempt educational institution it shall on an annual basis submit to the Revenue District Office concerned an annual information income from currency bank deposits and yield from deposit substitute instruments used actually,

and 15% tax on interest income under the expanded foreign currency deposit (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

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

following the end of its taxable year (Sec. 4, Finance Department Order No. banks or placed in money markets, on or before the 1 5th day of the fourth month

137-872

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to Section 109(1)(H) of the NIRC, SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON

CITY, INC.'s gross receipts from operations as a non-stock, non-profit 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 SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY, INC. are exempt from taxation provided they are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

1)INCOME TAX.

SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY,INC. is subject to income tax on all its income/receipts/revenues not expressly exempted and stated in the Certificate of Tax

I Rennhlir Act No 10963 increased the tax rate from 7.5% to 15% effective Januarv 1. 2018.

S an Isidro Labrador Catholic School of Quezon City, Inc. Page 3 of 3 Date issued MAY 2 4 Z013 CTE No. 9 65 - 2018

NIRC, as amended, on its income derived from any of its properties, real or personal, or any activity. actually, directly and exclusively used for educational purposes. Exemption. Moreover, it is subject to the corresponding internal revenue taxes imposed under conducted for profit, which income should be returned for taxation, uniess said revenues are

2) VALUE ADDED TAX/PERCENTAGE TAX

If SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY. INC. is engaged receipts do not exceed f3,000,000.00. 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

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 NIRC.

3) WITHHOLDING TAX.

income payments to individuals or corporations subject to the withhoiding tax pursuant to Section Title II of the NIRC, as implemented by Revenue Regulations No. 2-98, as amended, or if it makes 57 of the NIRC, and as implemented by Revenue Regulations No. 2-98, as amended. SAN ISIDRO LABRADOR CATHOLIC SCHOOL OF OUEZON CITY INC. shall be constituted as withholding agent for the government if it acts as an employer and its employees receive compensation income subject to the withholding tax under Section 79 (A), Chapter XIII]

TAXPAYER DUTIES & RESPONSIBILITIES

1) SAN ISWRO LABRADOR CATHOLIC SCHOOL OF QUEZON CITY 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 attached to the aforementioned Annual Information Return. gross income and expenses incurred during the preceding period and a certificate showing that there has not been any change in its By-laws, Articies of Incorporation, manner of operation and activities as well as sources and disposition of income. Copy of this Certificate of Tax Exemption shall be

2) Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision of it has been granted tax exemptions or tax incentives, and its tax liabilities, if any. 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

3) Further, it is also required under Section 6(C) in relation to Section 237 of the National Intemal

Revenue Code of 1997, as amended, to issue duly registered receipts or sales or commercial 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 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.

3 Republic Act No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,00000effective January 1, 2018.