BIR Ruling No. 497-2020

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

Certificate of Tax Exemption No. SH30-0497-2020

CERTIFICATE OF TAX EXEMPTION

issued to

SAN FERNANDO CITY, LA UNION INC. Quezon Avenue, San Fernando City, La Union CHRISTTHE KING COLLEGE SEC Company Reg. No. TIN:

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 and

2. Income derived from the operation of cafeterias/canteens, dormitories and 1.Tuition and Miscellaneous Fees; and bookstores located within its premises, owned and operated by CHRIST THE KING exclusively used for educational purposes. COLLEGE - SAN FERNANDO CITY,LA UNION INC.,to be actually,directly and

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 responsibilities stated in the Terms and Conditions hereto attached and made an

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 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 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_SEP 0 8 2020

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K-1 Commissioner of Internal Revenue CAESAR R. DULAY 036437

C

CHRIST THE KING COLLEGE -SAN FERNANDO CITY, LA UNION INC. Page 2 of 3 Date issued: SEp 0 8 2020 CTE No. Sv30 -0 4 97 -2020

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 D) INCOME TAX. CHRIST THE KING COLLEGE - SAN FERNANDO CITY, LA UNION 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 It is a non-stock, non-profit educational institution; and I. Its revenues are actually, directly and exclusively used for educational purposes.

CHRIST THE KING COLLEGE -SAN FERNANDO CITY,LA UNION INC.'s interest

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 income from currency bank deposits and yield from deposit substitute instruments used

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

( 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) ON EDUCATIONAL SERVICES

Pursuant to Section 109(1)(H) of the National Internal Revenue Code of 1997, as amended. CHRIST THE KING COLLEGE - SAN FERNANDO CITY, LA UNION 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 CHRIST THE KING COLLEGE - SAN FERNANDO CITY, LA UNION INC. are exempt from taxation provided they are owned and operated by it as ancillary services.

LIABILITY FOR INTERNAL REVENUE TAXES 1) INCOME TAX

CHRIST THE KING COLLEGE - SAN FERNANDO CITY,LA UNION INC. iS

subject to income tax on all its income/receipts/revenues not expressly exempted and

stated in the Certificate of Tax Exemption. Moreover, it is subject to the corresponding

internal revenue taxes imposed under National Internal Revenue Code of 1997, as amended,

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

CHRIST THE KING COLLEGE - SAN FERNANDO CITY, LA UNION INC. Page 3 of 3 CTE No. Date issued: CH30 -0 L 97 - 2 020 F 0 8 2020

on its income derived from any of its properties, real or personal, or any activity conducted directly and exclusively used for educational purposes. for profit, which income should be returned for taxation, unless said revenues are actually

2) VALUE ADDED TAX/PERCENTAGE TAX If CHRIST THE KING COLLEGE - SAN FERNANDO CITY, LA UNION INC. is engaged in the sale of goods or services in the course of a business pursuit, including or to the 3% percentage tax, if gross receipts do not exceed P3,000,000.00. 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,

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

3)WITHHOLDING TAX

CHRIST THE KING COLLEGE.- SAN FERNANDO CITY,LA UNION 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) CHRIST THE KING COLLEGE - SAN FERNANDO CITY, LA UNION 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 P1,919,500.00 to P3,000,000.00 effective Jan.

2018