BIR Ruling No. 563-2020

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City

Certificate of Tax Exemption No:

BOI-LEH-0563-202

CERTIFICATE OF TAX EXEMPTION TO ALL WHOM IT MAY CONCERN:

housing project, Fame Residences Tower 3 --EDSA and Mayflower St., Barangay Highway Hills, Mandaluyong City, consisting of 1,277 residential units used solely for family home or dwelling purposes, located at EDSA and Mayflower St., Barangay Highway Hills, Mandaluyong City, a project duly registered with the Board of Investments (BOI) under April 30, 2018 to April 29, 2021, pursuant to Executive Order (EO) No. 226, otherwise known (RR) No. 2-98, as amended, provided that the selling price of said residential units does not exceed P3,000,000.00' per residential unit. Identification Number (TIN) withholding tax on its income received directly in connection with its economic and low-cost Registration No. as the Omnibus Investments Code of 1987 and Section 2.57.5 (B)(2) of Revenue Regulations This certifies that SM DEVELOPMENT CORPORATION, with Taxpayers dated April 19, 2018, for a period of three (3) years beginning from , is exempt from income tax and creditable

below, or house and lot and other residential dwellings valued at P3,199,200.00 and below, is exempt from value-added tax (VAT) pursuant to Section 109 (1) (P) of the National Internal Revenue Code of 1997, as amended' Provided, however, that beginning January 01, 2021, the exemption from VAT shall only apply to sale of house and lot and other residential dwellings? with selling price of not more than P2,000,000.00. Moreover, the sale by the Company of residential lot valued at P1,919,500.00 and

appropriate taxes under the National Internal Revenue Code of 1997, as amended. with the BOI, if any, as well as the 3 10 parking slots, including those units used for commercial purposes such as ieasing, retail stores, offices, etc.,_shall be subject to the payment of However, the sale of residential units in excess of the residential units registered

applicable BIR rules and regulations and the Terms and Conditions stated at the'back hereof. The Company is liable, however, for all other applicable taxes not discussed above. The grant of tax exemption herein is subject to the compliance with the provisions of

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 OCT 0 1 2020

M0e3a1y

K-1-LMAT Commissioner of Internal Revenue CAESAR R. DULAY 036871

2 Per Certification dated June 25, 2020 issued by the BOI. Sale of lot only, regardless of the price, shall be subject to VAT starting January 01, 2021 pursuant to Republic Act (RA)

No. 10963.

[Fame Residences Tower 3] SM DEVELOPMENT CORPORATION CTE No.: Date issued: OCT 8+ 2020 BOI-LEH- 0563-2020

TERMS AND CONDITIONS OF THE CERTIFICATE OF TAX EXEMPTION

The exemption from income and creditable withholding taxes covers only income directly attributable to the revenues generated from the project, Fame Residences Tower 3 -- EDSA and

Mayflower St., Barangay Highway Hills, Mandaluyong City, consisting of 1,277 residential units used solely for family home or dwelling purposes, located at EDSA and Mayflower St., Barangay Highway Hills, Mandaluyong City. Such exemption shall not cover revenues from units

with selling price exceeding P3,000,000.00.

2.In the computation of the project's ITH, the following shall apply:

a. Only income generated from the sale of housing units (Fame Residences Tower 3 --EDSA]

and Mayflower St., Barangay Highway Hills, Mandaluyong City) with selling price not

exceeding Php3.0M and used solely for family home or dwelling purposes and not for

commercial purposes such as leasing, retail stores, offices, etc. shall be qualified.

b Interest income from in-house financing shall not be considered as revenues generated

from the registered activity.

3. The Company's entitlement to ITH for its BOI-registered housing project is subject to the

compliance with the provisions of the Specific Terms and Conditions of its BOI Registration.

4 Pursuant to Section 4 of Republic Act (RA) No. 107083, the Company is required to file its tax

returns and pay its tax liabilities, on or before the deadline as provided under the National Internal

Revenue Code of 1997, as amended, using the electronic system for filing and payment of taxes of

the BIR. It shall file with BOI a complete annual tax incentives report of its income-based tax

incentives, VAT and duty exemptions, deductions, credits or exclusions from the tax base, as may

be provided under E.O. 226, within the periods prescribed under RA No. 10708's Impiementing

Rules and Regulations and Joint Memorandum Circular No. 1-2016 dated September 1, 2016.

5.The Company shall be constituted as a withholding agent for the government if it acts as employer

and any of its employees received compensation income subject to compensation withholding tax,

or if it makes payments to individuals or corporations subject to the withholding taxes as source as

required under Chapter XIII and Section 57 of the National Internal Revenue Code of 1997, as

amended, and implemented by Revenue Regulations (RR) No. 2-98, as amended.

6 The Company is required to file on or before the 15th day of the fourth month following the close

of its accounting period of a Profit and Loss Statement and Balance Sheet with the Annual

Information Return under oath, stating its gross income and expenses incurred during the taxable

year.

Finally, the Company's books of accounts and other pertinent records shall be subject to periodic 7

examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether

it is complying with the conditions under which it has been granted tax exemption or tax incentives

and its tax liability, if any, pursuant to Section 235 of the National Internal Revenue Code of 1997,

as amended.

An Act Enhancing Transparency in the Management and Accounting of Tax Incentives Administered by Investment

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