BIR Ruling No. 835-2018

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No. 835-2018

CERTFICATE OF TAX EXEMPTON

issued to

LA SALLE GREENHILLS, INC 39/F Summit One Office Tower 530 Shaw Blvd., Mandaluyong City

SEC Company Reg. No. TIN:

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 oniy on the following revenues or receipts:

2 Tuition Fees & Other School Related Fees; Income derived from the operation"of cafeterias/canteens and bookstores located within its premises, owned and operated by LA SALLE GREENHILLS, INC.,"to be actually, directly and exclusiveiy used for educational purposes.

nothing follows

subject to the provisions of applicable BIR rules and regulations and the tax exemptions, liabiities 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_MAY_1 8 2018

1aow CAESAR R. DULAY Commissioner of Internal Revenue

K- 0 16567

Page 2 of 3 LA SALLE GREENHILLS, INC. CTE No.- 8 3_5 -- 2 0 1 8 Date issued MAY 8 201R

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.

LA SALLE GREENHILLS, 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 fotlowing requisites as set forth under Revenue Memorandum Order (RMO) No 44-2016, to wit:

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

LA SALLE GREENHILLS, INC.'s interest income from currency bank deposits and yietd 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%1" 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 financiai 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 schooi administration on proposed projects (i.e.. construction and/or improvement of school buildings and facilities, acquisition of equipment, books and the tike) 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 mointh 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, LA SALLE GREENHILLS. 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 and bookstores located within the premises LA SALLE GREENHILLS. INC. are exempt from taxation provided they are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

1 Republic Act No. 10963 increased the tax rate from 7.5% to 15% effective January 1, 2018. 2 Department Order No. 149-95 dated November 24, 1995 amending Department Order No. 137-87.

LA SALLE GREENHILLS, INC. Page 3 of 3 Exerrption. Moreover, it is subject to the corresponding internal revenue taxes imposed under CTE No..8 3 5 - 2 0 Date issuedMAY 1 8 ZUli

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/PERCENTAGE TAX

If LA SALLE GREENHILLS, INC. is engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, its revenue derived therefrom shall be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (P3,000,000.003), or to the 3% percentage tax, if gross receipts do not exceed'P3,000,000.00.

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

3.WITHHOLDING TAX

LA SALLE GREENHILLS, INC. shalt 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, Titie 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 withhoiding tax pursuant to Section 57 of the NIRC, and as implemented by Revenue Reguiations No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

1) LA SALLE GREENHILLS, 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 speciat 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 saie or transfer of merchandise or for services rendered which are not directiy 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 threshoid from #1,919,500.00 to #3,000,000.00 effective January 1, 2018.