BIR Ruling No. 317-2017

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Certificate of Tax Exemption No.

317-2017

CERTIFICATE OF TAX EXEMPTION

issued to

NAGA PAROCHIAL SCHOOL, INC. Naga Parochial School, Naga City TIN

SEC Company Reg. No.

This certifies that the above-named corporation is a non-stock, non-profit corporation 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:

1. Tuition Fees; 2. Miscellaneous and Laboratory Fees; and 3. Income derived from the operation of cafeterias/canteens and bookstores

Iocated within its premises, owned by Naga Parochial School Inc., which income is 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.

documents as represented and submitted. However, if upon investigation, the BIR ascertains This Certificate of Tax Exemption is being issued on the basis of the facts and

that the facts are different, then this Certificate shall be considered null and void.

Issued this day of JUN 12017

1ouom CAESAR R.DULA Commissioner of Internal Revenue K-1 B 007117

Naga Parochial School, Inc. CTE No. 17 01 Page 2 of 3 Date issued_6- 2017

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.NAGA PAROCHIAL SCHOOL,INC.is exempt from the payment of income

tax only on revenues and receipts enumerated on the Certificate of Tax Exemption. It is

Memorandum Order (RMO) No 44-2016, to wit: understood that the school must continue to meet the following requisites as set forth under Revenue

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

NAGA PAROCHIAL 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 7 1/2% 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:

earned from passive investment not subject to the 20% final withholding tax and 7 1/2% tax on interest income under the expanded foreign currency deposit (a)Certification from their depository banks as to the amount of interest income

system imposed by Section 27 (D) (1) of the National Internal Revenue Code of 1997, as amended:

(bCertification 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 1 5th day of the fourth month following the end of its taxable year (Sec. 4, Finance Department Order No. 137-87)

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to Section 109(H

stock, non-profit educational institution are exempt from VAT. of the NIRC,NAGA PAROCHIAL SCHOOL,INC.S gross receipts from operations as a non

LIABILITY FOR INTERNAL REVENUE TAXES

1 INCOME TAX

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

Naga Parochial School,Inc Page 3 of 3 CTE No. Date issued_642017 3172017

NAGA PAROCHIAL_SCHOOLINC.issubjectto 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 NIRC, 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

If NAGA PAROCHIAL SCHOOL, INC. is engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, in general, it shall be liable for V AT on the revenues derived therefrom.

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 pursuant to Sections 106 and 107 of the NIRC.

3) WITHHOLDING TAX

NAGA PAROCHIAL SCHOOL,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 NIRC,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 NIRC, and as implemented by Revenue Regulations No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

1) NAGA PAROCHIAL 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 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