BIR Ruling No. 390-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No. CH0-0390-2020

CERTIFICATE OF TAXEXEMPTION

issued to

AOUINAS SCHOOL,INC. 183 F. Blumentritt, Kabayanan, San Juan City 1500

TIN: SEC Company Reg. No.

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

1. Tuition, Registration and Miscellaneous Fees; and 2. Income derived from the operation of cafeterias/canteens, dormitories and bookstores

Iocated within its premises, owned and operated by AQUINAS SCHOOL, INC., to be

actually, directly and exclusively used for educational purposes.

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 JUL172020

aawy

CAESAR R.DULAY

K-1/180089 Commissioner of Internal Revenue 035789 Q

Aquinas School, Inc. Page 2 of 3 CTE No. Date issued SH30-0390-202 I 11TZU2U

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. AQUINAS SCHOOL,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.

AQUINAS SCHOOL, 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, 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

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-

8

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

109(1)(H) of the National Internal Revenue Code of 1997, as amended, AQUINAS SCHOOL

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 AQUINAS

SCHOOL, INC. are exempt from taxation provided they are owned and operated by it as

ancillary services.

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

AQUINAS SCHOOL, 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

C

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

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

Page 3'of 3 Aquinas School, Inc. Date issued CTE No. CH7b-0390-2020 JUL 17 2U20

subject to the corresponding internal revenue taxes imposed under National Internal Revenue 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. Code of 1997, as amended, on its income derived from any of its properties, real or personal,

2) VALUE ADDED TAX/PERCENTAGE TAX If AQUINAS SCHOOL, INC. is engaged in the sale of goods or services in the course of a Pesos.(P3,000,000.00)3, or to the 3%percentage tax, if gross receipts do not exceed business pursuit, including 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 P3,000,000.00.

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

3WITHHOLDING TAX tax under Section 79 (A), Chapter XIII, Title II of the National Internal Revenue Code of 1997, acts as an employer and its employees receive compensation income subject to the withholding Section 57 of the National Internal Revenue Code of 1997, as amended, and as implemented AQUINAS SCHOOL, INC. shall be constituted as withholding agent for the government if it 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 by Revenue Regulations No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

1 AQUINAS SCHOOL, 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 disposition of income. Copy of this Certificate of Tax Exemption shall be attached to the By-laws, Articles of Incorporation, manner of operation and activities as well as sources and aforementioned 'Annual Information Return.

2) Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision to examination by the BIR for purposes of ascertaining'compliance with the conditions under 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 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 invoices for each sale or transfer of merchandise or for services rendered which are not directly Revenue Code of .1997, as amended, to issue duly registered receipts or sales or commercial 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.

3 Republic Act No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,000.00 effective Jan. 2018 C