BIR Ruling No. 98-2018

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE Quezon City

Certificate of Tax Exemption No. 098-2018

CERTFICATE OF TAX EXEMPTION issued to

64 Xavier"Greenhills, San Juan, Metro Manila 1 502 XAVIER SCHOOL,INC SEC Company Reg. No. TIN:

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

+ Tuition fees and other related fee's;

Income derived from operation of cafeterias/canteens, dormitories and bookstores actually, directly and exclusively used for educational purposes: located within its premises, owned and operated by XAVIER SCHOOL, INC., to be -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.

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

basis for its income tax exemption.

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_jAN 3 1 2018

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Commissioner of Internal .Revent CAESAR R. DULAY 8.55

K-1-ASB

Xavier Schoot, Inc. Page 2 of 3 Date issued CTE No. 098-2018 1-31-2018

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

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

tax-exempt educational 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: XAVIER SCHOOL, 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 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 conditions that as a

of 1997, as amended; (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 7 1/2% tax on interest income under the expanded foreign currency deposit system imposed by Section 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 markets, on or before the 1 5th day of the fourth month following the end of its taxable year (Sec. 4, Finance Department Order No. 137-87) of equipment, books and the like) to be funded out of the money deposited in

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES.Pursuant to Section non-profit educational institution is exempt from VAT. 109(1)(H) of the NIRC, XAVIER SCHOOL, INC.'s gross receipts from operations as a non-stock,

LIABILITY FOR INTERNAL REVENUE TAXES 1) INCOME TAX

XAVIER SCHOOL, INC. is subject to income tax on all its income/receipts/revenues not from any of its properties, real or personal, or any activity conducted for profit, which income expressly exempted and stated in the Certificate of Tax Exemption. Moreover, it is subject to the corresponding internal revenue taxes imposed under NIRC, as amended, on its income derived

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

Page 3 of 3 Xavier School, Inc. CTE No. Date issued 1-31-2018 098-2018

should be returned for taxation, unless said revenues are actually, directly and exclusively used for educational purposes.

2) VALUE ADDED TAX/PERCENTAGE TAX

the 12% VAT, in case the gross receipts from such sales is One Million Nine Hundred Nineteen If XAVIER SCHOOL, 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 Thousand Five Hundred Pesos (P1,919,500.00), or to the 3% percentage tax, if gross receipts do not exceed P1.919,500.00.

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

No. 2-98, as amended. XAVIER SCHQOL, 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, Title II of the NIRC, as implemented by Revenue Regulations No. 2- 98, as amended, or if it makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the NIRC, and as implemented by Revenue Regulations

TAXPAYER DUTIES & RESPONSIBILITIES

1) XAVIER SCHOOL, INC. is required to file on or before the 15th day of the fourth month Information Return. 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 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, Annual Information Return under oath, stating its gross income and expenses incurred during the

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

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.