BIR Ruling No. 391-2020

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

SH30-0391-2020 Certificate of Tax Exemption No.

CERTIFICATE OF TAX EXEMPTION

issued to

IMMACULATE HEART ACADEMY -TANJAY,INC

Rizal Street, Barangay 2, Tanjay City. Negros Oriental SEC Company Reg. No. 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

2. Income derived from the operation of cafeterias/canteens, dormitories and bookstores

located within its premises, owned and operated by IMMACULATE HEART

educational purposes. ACADEMY - TANJAY, INC. to be actually, directly and exclusively used for

nothing follows.

integral part hereof. It is liable, however, to all other taxes not enumerated above. liabilities and responsibilities stated in the Terms and Conditions hereto attached and made an subject to the provisions of applicable BIR rules and regulations and the tax exemptions,

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 of JUL17_2020!

asae

CAESAR R.DULAY

K-1-MDT Commissioner of Internal Revenue 035798

IMMACULATE HEART ACADEMY - TANJAY, INC. CTE No. SH30-0391-2021

Page 2 of 3 Date issued JUL17 20201

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. IMMACULATE HEART ACADEMY -TANJAY,INC.is exempt from the

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: payment of income tax only on revenues and receipts enumerated on the Certificate of Tax

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

IMMACULATE HEART ACADEMY - TANJAY, 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 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

Revenue District Office concerned an annual information return and duly audited financial the conditions that as a tax-exempt educational institution it shall on an annual basis submit to the

statement together with the following:

(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 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.

2) VALUE ADDED TAX (VAT) ONEDUCATIONAL SERVICES. Pursuant to Section

109(1)(H) of the National Internal Revenue Code of 1997, as amended,IMMACULATE HEART

ACADEMY - TANJAY, INC.'s gross receipts from operations asa 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

IMMACULATE HEART ACADEMY - TANJAY,INC. are exempt from taxation provided

they are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX.

IMMACULATE HEART ACADEMY - TANJAY,INC. is subject to income tax on all its income/receipts/revenues not expressly exempted and stated in the Certificate of Tax Exemption

Aa

Republic Act No.10963 increased the tax rate from 7.5% to 15% effective January 1,2018.

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

IMMACULATE HEART ACADEMY -- TANJAY, INC. CTE No. S0-0391-2020 Page 3 of 3 Date issued_JUL17 202

Moreover, it is subject to the corresponding internal revenue taxes imposed under National Internal Revenue Code of 1997, 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 IMMACULATE HEART ACADEMY -- TANJAY,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 15% V AT, 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 15% VAT pursuant to

Sections 106 and 107 of the National Internal Revenue Code of 1997, as amended.

3)WITHHOLDING TAX

IMMACULATE HEART ACADEMY- TANJAY, 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 National Internal

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.

TAXPAYER DUTIES & RESPONSIBILITIES

1) IMMACULATE HEART ACADEMYTANJAY, 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 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.

Republic Act No.10963 increased the VAT threshold from P1919,500.00to P3,000,000.00ffective January l,2018.