BIR Ruling No. 427-2019

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No.

0427-2019

CERTIFICATE OF TAX EXEMPTION

issued to

MALATE CATHOLIC SCHOOLINC 1030 A. Mabini cor. San Andres Sts., Malate, Manila 1004

SEC Company Reg. No. TIN:

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

1. Tuition and Miscellaneous Fees; and 2. Income derived from the operation of cafeterias/canteens, dormitories and bookstores

Iocated within its premises, owned and operated by MALATE CATHOLIC SCHOOL. 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.

This certification shall be valid from the date of issuance until revoked by this Office 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 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 ofjUL 3 0_2019

aeAa

CAESAR R.DULAY Commissioner of Internal Revenue K-1/spf1 80963 027.262

MALATE CATHOLIC SCHOOL, INC Page 2 of 3 CTE No. Date issued JUL 3 0 2019 0527-2019

TERMS AND CONDITIONS OF THE 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.MALATE CATHOLIC 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:

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

MALATE CATHOLIC 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 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 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

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 NIRC, MALATE CATHOLIC SCHOOL,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 MALATE CATHOLIC SCHOOL, INC. are exempt from taxation provided they are owned and operated by it as ancillary services.

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX MALATE CATHOLIC SCHOOL. INC. is subject to income tax on all its

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

! Republic Act No. 10963 increased the tax rate from 7.5% to 15% effective Jan. 1, 2018 2 Department Order No. 149-95 dated November 24, 1995 amending Department Order No. 137-87

Page 3 of 3 MALATE CATHOLIC SCHOOL, INC CTE No. Date issued JL 32019 0427-2019

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

NIRC, 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.

2) VALUE ADDED TAX/PERCENTAGE TAX

If MALATE CATHOLIC 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 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

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

MALATE CATHOLIC SCHOOL, 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 No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

MALATE CATHOLIC SCHOOL, INC. is required to file on or before the 15th day cf 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 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 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 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 P3,000,000.00 effective Jan. 2018