BIR Ruling No. 268-2018

BUREAU OF INTERNAL REVENUE REPUBLIC OF THEPHILIPPINES DEPARTMENT OF FINANCE Quezon City

Certificate of Tax Exemption No.

268-2018

CERTIFICATE OF TAX EXEMPTION

issued to

THE SALVATION ARMY EDUCATIONAL SERVICES. Asingan-Villasis Rd., Baro, Asingan, Pangasinan SEC Company Reg. No. INCORPORATED TIN

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: This certifies that the above-named entity is a non-stock, non-profit corporation and has

23 4 5 1 Library, computer, and other miscellaneous fees; and Tuition fees; Registration fees; Graduation fees; Donations and grants.

nothing follows

integral part hereof. It is liable, 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

for violation of any provisions of applicable rules and regulations of the BIR, or the terms and character, purpose or method of operation of the corporation which are inconsistent with the basis for its income tax exemption. conditions herein set forth. It shali 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

that the facts are different, then this Certificate shall be considered null and void. documents as represented and submitted. However, if upon investigation, the BIR ascertains This Certificate of Tax Exemption is being issued on the basis of the facts and

Issued this. day of FEB 2 6 2018

K-1-RFR Commissioner of Internal Revenue CAESAR R.DULAY 013664

Page 2 of 4 The Salvation Army Educational Services, Incorporated Date Issued: 2--26--2018 CTE No. 268-2018

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

TAX EXEMPTION

D) INCOME TAX

exempt from the payment of income tax only on revenues and receipts enumerated on the following requisites as set forth under Revenue Memorandum Order (RMO) No 44- the Certificate of Tax Exemption. It is understood that the school must continue to meet 2016, to wit: THE SALVATION ARMY EDUCATIONAL SERVICES, INCORPORATED is

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

purposes.

financial statement together with the following: used actually, directly and exclusively in pursuance of its purpose as an educational institution, are exempt from the 20% final tax and 7 1/2% 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 amended, subject to compliance with the the Revenue District Office concerned an annual information return and duly audited interest income from currency bank deposits and yield from deposit substitute instruments conditions that as a tax-exempt educational institution it shall on an annual basis submit to THE SALVATION ARMY EDUCATIONAL SERVICES, INCORPORATED'S

a) Certification from their depository banks as to the amount of interest withholding tax and 7 1/2% tax on interest income under the expanded National Internal Revenue Code of 1997, as amended; income earned from passive investment not subject to the 20% final foreign currency deposit system imposed by Section 27 (D) (1) of the

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

C Board Resolution by the school administration on proposed projects

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

from operations as a non-stock, non-profit educational institution are exempt from VAT. Section 109(1)(H) of the National Internal Revenue Code of 1997, as amended THE SALVACION ARMY EDUCATIONAL SERVICES,INCORPORATED's gross reCeipts 2) VALUE-ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to

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

The Salvation Army Educational Services, Incorporated Page 3 of 4 Date Issued:26--2018 CTE No. 2682018

LIABILITY FOR INTERNAL REVENUE TAXES 1) INCOME TAX

amended, on its income derived from any of its properties, real or personal, or any activity internal revenue taxes imposed under the National Internal Revenue Code of 1997, as conducted for profit, which income should be returned for taxation, unless said revenues are actually, directly and exclusively used for educational purposes. THE SALVATION ARMY EDUCATIONAL SERVICES, INCORPORATED 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

2) VALUE-ADDED TAX/PERCENTAGE TAX

transactions incidental thereto, its revenues derived therefrom shall be subject to the 12% receipts do not exceed P1.919,500.00. If THE SALVATION ARMY EDUCATIONAL SERVICES, INCORPORATED is engaged in the sale of goods or services in the course of a business pursuit, including VAT, in case the gross receipts from such sales is One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00), 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 National Internal Revenue Code of 1997, as amended.

3) WITHHOLDING TAX

Revenue Regulations No. 2-98, as amended. 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 payments to individuals or corporations subject to the withholding tax pursuant to Section implemented by Revenue Regulations No. 2-98, as amended, or if it makes income 57 of the National Internal Revenue Code of 1997, as amended, and as implemented by THE SALVATION ARMY EDUCATIONAL SERVICES, INCORPORATED shall (A), Chapter XIII, Title'II of the National Internal Revenue Code of 1997, as amended, as

TAXPAYER DUTIES & RESPONSIBILITIES

THE SALVATION ARMY EDUCATIONAL SERVICES, INCORPORATED 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 disposition of income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return. preceding period and a certificate showing that there has not been any change in its By. Iaws, Articles of Incorporation, manner of operation and activities as well as sources and

2) Under Section 235 of the National Internal Revenue Code of 1997, as amended, any incentives, and its tax liabilities, if 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

The Salvation Army Educational Services, Incorporated. Page 4 of 4 Date Issued: CTE N60 28018

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 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 No. [RMC] No. 76-2003). 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.