BIR Ruling No. 260-2021

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No.

SHiC-ISH

CERTIFICATE OF TAX EXEMPTION

issued to

UNIVERSITY OF SANTO TOMAS, INC.

SEC Company Reg. No. TIN: Espania, Manila

This certifies that the above-named corporation is a non-stock, non-profit corporation and has proven by actuai 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 Fees and Other School Related Fees on its degree programs recognized by 2. Donations, except those given by hospital patients which partake the nature of the Commission on Higher Education (CHED);

3. Income derived from the operation of cafeterias/canteens, dormitories and payment for hospital services; and

SANTO TOMAS, INC., to be actually, directly and exclusively used for educational bookstores located within its premises, owned and operated by UNIVERSiTY OF

purposes. 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 responsibitities stated in the Terms and Conditions hereto attached and made an

conditions herein set forth. It shall likewise be revoked if there are materia! changes in the character, purpose or method of operation of the corporation which are inconsistent with the basis for its income tax exemption. violation of any provisions of appticable 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 for

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 documents

Issued this. day of.:-$

1e8a1 1

K- t Commissioner of internal Revenue CAESAR R. DULAY 30439 5 T

Page 2 of 3 ENIVERSUTY OF SANTO TOMAS,INC Datc issued CTE No.

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. UNIVERSITY OF SANTO TOMAS, 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 foilowing requisites as set forth under Revenue Memorandum Order (RMO) No 44-2016, to wit:

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

UNIVERSITY OF SANTO TOMAS. 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.

return and duly audited financial statement together with the following: 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

C) b a} Board Resolution by the school administration' on proposed projects (i.e.. following the end of its taxable year (Sec. 4, Finance Department Order No. 137- 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 construction and/or improvement of school buildings and facilities, acquisition of 8 Certification of actual utilization of the said income; and imposed by Section 27(D)(1) of the National Internal Revenue Code of 1997, as amended. Certification from their depository bank as to the amount of interest income 15% tax on interest income under the expanded foreign currency deposit system earned from passive investment not subject to the 20% final withholding tax and

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

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX any of its properties, real or personal, or any activity conducted for profit, which income shou!d be returned for taxation, unless said revenues are actually, directly and exclusivcly used for educational purposes. UNIVERSITY OF SANTO TOMAS, INC. is subject to income tax on all its under National Internal Revenue Code of 1997, as amended, on its income derived from income/receipts/revenues not expressly exempted and stated in the Certificate of Tax Exemption. Moreover, it is subject to the corresponding internal revenue taxes imposcd

Repuhlrc Act Ng. 10963 increased the tax rate from 7.5 to 15"0oeffective Jan. I, 20 Dx partment Order No149 95 dated Nowemfxer 24.1995 aneneng Ieparment Order No 137 87

(NIVERSITY OF SANTO TOMAS. INC. Page 3 of 3 Date issued ('Ie Ns " t

UNIVERSITY OF SANTO TOMAS, INC. revenues from hospital operations are subject to ten (10%) corporate income tax pursuant to Section 27 (B) of the National Internal Revenue Code of 1997, as amended. Provided, that if the gross income from non- hospital operations exceeds 50% of the total gross income from all sources, the entire taxable income from hospital and non-hospital operations shall be subject to the 30% regular income tax.

2) VALUE ADDED TAX/PERCENTAGE TAX

If UNIVERSITY OF SANTO TOMAS, 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 l2% VAT, in case the gross receipts from such saies 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, services and importation of goods shall nevertheless be subject to the l2% VAT pursuant to Sections 106, 108 and 107 of the National Internal Revenue Code of 1997, as amended.

3) WITHHOLDING TAX UNIVERSITY OF SANTO TOMAS. INC. shail 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 National Internat Revenue Code of 1997, as amended, 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 National Internal Revenue Code of 1997, as amended, and as implemented by Revenue Regulations No. 2-98, as amended.

1) The honoraria/allowances given to members of the Board of Trustees must be reasonable and TAXPAYER DUTIES & RESPONSIBILITIES Subject to liquidation (DOF Opinion No. 005-2019).

2) Required to file on or before the i5th day of the fourth month foilowing the end of the disposition of income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return. 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. Articies of Incorporation, manner of operation and activities as well as sources and

3) Under Section 235 of the National Internal Revenue Code of 1997, as amended. any provision of 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. 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

4) Further, it is also required under Section 6(C) in relation to Section 237 of the Nationat Internal 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 Memoranduin Circular No. [RMC] No. 76-2003). Revenue Code of 1997, as amended, to issue duly registered receipts or sales or commercial

5) Finally, it is subject to the payment of registration fee of PhP 500.00 as prescribed in Section 236(B) of the National Internat Revenue Code of 1997, as amended.

Republic Act No 10963 inereased the VAT threshoid from P1.919.500.30 to P3.000.00.00effective Jan 1.2018