BIR Ruling No. 84-2020

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No. SH30-016-2020

CERTIFICATE OF TAX EXEMPTION

issued to

ACADEMIA DE SAN JOSE, INC.1

Centro Mandaue City Cebu 6014 SEC Company Reg. No. TIN:

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: 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

INC., to be actually, directly and exclusively used for educational purposes. Iocated within its premises, owned and operated by ACADEMIA DE SAN JOSE,

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 of JAN 2 4 2020

Muom

CAESAR R. DULAY Commissioner of Internal Revenue

K-1-JAC 032351

C

FormerlySt.Joseph's Academy of Mandaue,Inc.

Academia De San Jose, Inc. Page 2 of 3 CTE No.SH30-016-2020 Date issued JAN 2 4 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

1)INCOME TAX. ACADEMIA DE SAN JOSE, 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:

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

of 1997, as amended. Provided that if the gross income from non-hospital operations exceeds ACADEMIA DE SAN JOSE, INC.'s revenues from hospital operations are subject to ten (10%) corporate income tax pursuant to Section 27(B) of the National Internal Revenue Code 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.

ACADEMIA DE SAN JOSE, 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%2 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 the conditions that as a

tax-exempt educational 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 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)3

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

109(1)(H) of the National Internal Revenue Code of 1997, as amended, ACADEMIA DE SAN

JOSE, INC.'s gross receipts from operations as a 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 ACADEMIA DE

SAN JOSE, INC. are exempt from taxation provided they are owned and operated by it as ancillary

activities.

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

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

Academia De San Jose, Inc. Page 3 of 3 Date issued_JAN 2 4 2020 CTE No.SH300162020

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX.

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, on its income derived from any of its properties, real or personal, or any activity actually, directly and exclusively used for educational purposes. conducted for profit, which income should be returned for taxation, unless said revenues are ACADEMIA DE SAN JOSE, INC. is subject to income tax on all its income/receipts/revenues

2) VALUE ADDED TAX/PERCENTAGE TAX

If ACADEMIA DE SAN JOSE, INC. is engaged in the sale of goods or services in the course of (P3,000,000.00), or to the 3% percentage tax, if gross receipts do not exceed P3,000,000.00. subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos a business pursuit, including transactions incidental thereto, its revenues derived therefrom shall be

Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or properties Sections 106 and 107 of the National Internal Revenue Code of 1997, as amended. or services and importation of goods shall nevertheless be subject to the 12% VAT pursuant to

3)WITHHOLDING TAX

if it acts as an employer and its employees receive compensation income subject to the withholding ACADEMIA DE SAN JOSE, INC. shall be constituted as withholding agent for the government

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 ACADEMIA DE SAN JOSE, 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. O

4 Republic Act No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,000.00 effective January 1, 2018.