BIR Ruling No. 499-2020

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No. St30-0499-2020

CERTIFICATE OF TAX EXEMPTION

issued to

LICEO DEL VERBO DIVINO,INC.

Avenida Veteranos, Tacloban City, Leyte, Philippines SEC Company Reg. TIN:

This certifies that the above-named educational institution is a non-stock, non-profit corporation and has proven by actual operation that its primary purpose is one of those

It is exempt from INCOME TAX only on the following revenues or receipts: enumerated under Section 30(H) of the National Internal Revenue Code of 1997, as amended.

1.Tuition fees and other related fees; 2. 1 Donations/Subsidies; and 3.Income derived from operation of cafeterias/canteens, dormitories and bookstores located within its premises. owned and operated by LICEO DEL VERBO

DIVINO, INC., to be actually, directly and exclusively used for educational

purposes.

nothing follov

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 SEP 0 8 2020

1080M

CAESAR R.DULAY

3 Commissioner of Internal Revenue 036434

1 Formerly: Divine Word University of Tacloban, Inc. Formerly: Divine Word College of Tacloban City, Inc.

LICEO DEL VERBO DIVINO,INC CTE No. SH300 4 9 3 - 2 0 2 0

Page 2 of 4 Date issued SEPU 8 ZUZU

K- 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.LICEO DEL VERBO DIVINO,INC. is exempt from the payment of income understood that the school must continue to meet the following requisites as set forth under Revenue Memorandum Order (RMO) No 44-2016, to wit: tax only on revenues and receipts enumerated on the Certificate of Tax Exemption. It is

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

from deposit substitute instruments used actually, directly and exclusively in pursuance of its LICEO DEL VERBO DIVINO, INC.'s interest income from currency bank deposits and yield

Office concerned an annual information return and duly audited financial statement together with 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 the following: 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

(aCertification 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

construction and/or improvement of school buildings and facilities, acquisition (c)Board Resolution by the school administration on proposed projects (i.e.. 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 LICEO DEL VERBO DIVINO.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 LICEO DEL VERBO DIVINO, INC. are exempt from taxation, provided they are owned and operated by it as ancillary activities.

2 Republic Act (RA) No. 10963 increased the Final withholding tax on Income from 7.5% to 15% effective

3 Department Order No. 149-95 dated November 24, 1995 amending Department Order No. 137-87 January 01,2018

O

LICEO DEL VERBO DIVINO, INC. Page 3 of 4 Date issued SEP0 8 2020 CTE No. SH30-0499-2020

LIABILITY FOR INTERNAL REVENUE TAXES

D)INCOME TAX

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, 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 LICEO DEL VERBO DIVINO, INC. is subject to income tax on all its purposes.

2) VALUE ADDED TAX/PERCENTAGE TAX

be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (P3,000,000.00)4 or to the 3% percentage tax, if gross receipts do not exceed Three Million Pesos (P3,000,000.00) If LICEO DEL VERBO DIVINO, INC. is engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, its revenues derived therefrom shall

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, as amended. or services and importation of goods shall nevertheless be subject to the 12% VAT pursuant to

3) WITHHOLDING TAX

LICEO DEL VERBO DIVINO, 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) LICEO DEL VERBO DIVINO, 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 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 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-

Annual Information Return.

2)Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision of 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. existing general and special law to the contrary notwithstanding, the books of accounts and other

4 Republic Act (RA) No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,000.00 effective January 01,2018

O

LICEO EL VERBO DIVINO, INC. CTENo.SH-S92

Page 4 of 4 Date issued SEP 0 8 2020

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.