BIR Ruling No. 518-2020

REPUBLICOFTHE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No:

BOI-LEH-0518-20 20

CERTIFICATE OF TAX EXEMPTION

TO ALL WHOM IT MAY CONCERN

Identification Number (TIN withholding tax on its income received directly in connection with its low-cost mass housing West, Tagaytay City, a project duly registered with the Board of Investments (BOI) under in no case earlier than the date of registration of the project with the BOI, pursuant to Executive project, Wind Residences Tower 3 - Brgy. Maharlika West, Tagaytay City, consisting of 300 housing units used solely for family home or dwelling purposes, located at Brgy. Maharlika Registration No. from December 2011 or actual start of commercial operations/selling, whichever is earlier, but Order (EO) No.226, otherwise known as the Omnibus Investments Code of 1987 and Section 2.57.5 (B) (2) of Revenue Regulations (RR) No. 2-98, as amended. This certifies that SM DEVELOPMENT CORPORATION, with Taxpayers dated December 23,2011, for a period of three (3) years beginning is exempt from income tax and creditable

below, or house and lot and other residentiai dwellings valued at P3, 199,200.00 and below, is exemption from VAT shall only apply to sale of house and lot and other residential dwellings? Revenue Code of 1997, as amendedProvided, however, that beginning January 01, 2021, the with selling price of not more than P2,000,000.00. exempt from value-added tax (VAT) pursuant to Section 109 (1)(P) of the National Interna Moreover, the sale by the Company of residential lot valued at P1,919,500.00 and

commercial purposes such as leasing, retail stores, offices, etc., shall be subject to the payment the BOI (per License to Sell No. as well as the 8 commercial units and 145 parking slots, including those other units used for of appropriate taxes under the National Internal Revenue Code of 1997, as amended. However, the sale of housing units in exeess of the 300 housing units registered with dated May 29, 2013, the excess is 334 housing units),

applicable BIR rules and regulations and the Terms and Conditions stated at the back hereof. The Company is liable, however, for all other applicable taxes not discussed above. The grant of tax exemption herein is subject to the compliance with the provisions of

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. This Certificate of Tax Exemption is being issued on the basis of the facts and

Issued this. day ofSEP 1 5 2020

1aay

K-I-LMAT Commissioner of Internal Revenue CAESAR R.DULAY 036700

2 Sale of lot only, regardless of the price, shall be subject to VAT starting January 01, 2021 pursuant to Republic Act (RA) The registered project's address was amended from Brgy. Tagaytay West, Tagaytay City to Brgy. Maharlika West. Tagaytay City per ManCom Resolution No. 05-07, Series of 2020 dated February 10, 2020. No. 10963.

(Wind Residences Tower 3) SM DEVELOPMENT CORPORATION CTE No.: Date issued: BOI-LEH-0518-2023 SEP T5 702U

TERMS AND CONDITIONS

OF THE CERTIFICATE OF TAX EXEMPTION

The exemption from income and creditable withholding taxes covers only income directly

attributable to the revenues generated from the project, Wind Residences Tower 3 -- Brgy.

Maharlika West, Tagaytay City, consisting of 300 housing units used solely for family home or

dwelling purposes, located at Brgy. Maharlika West, Tagaytay City. Such exemption shali not cover

revenues from units with selling price exceeding P2,500,000.00.

2. The Company is obligated to construct and sell housing units based on the following

schedules/sales revenues:

Year (No. of Units) Volume Value

2

3

Total

3. In the computation of the project's ITH, interest income from in-house financing shall not be

considered as part of the revenues generated from the registered housing project.

4. The Company's entitlement to ITH for its BOI-registered housing project is subject to the

compliance with the provisions of the Specific Terms and Conditions of its BOI Registration.

5. Pursuant to Section 4 of Republic Act (RA) No. 107083, the Company is required to file its tax

returns and pay its tax liabilities, on or before the deadline as provided under the National Internal

Revenue Code of 1997, as amended, using the electronic system for filing and payment of taxes of

the BIR. It shall file with BOI a complete annual tax incentives report of its income-based tax

incentives, VAT and duty exemptions, deductions, credits or exclusions from the tax base, as may

be provided under E.O. 226, within the periods prescribed under RA No. 10708's Implementing

Rules and Regulations and Joint Memorandum Circular No. 1-2016 dated September 1, 2016.

6. The Company shall be constituted as a withholding agent for the government if it acts as employer

and any of its employees received compensation income subject to compensation withholding tax,

or if it makes payments to individuals or corporations subject to the withholding taxes as source as

required under Chapter XIII and Section 57 of the National Internal Revenue Code of 1997, as

amended, and implemented by Revenue Regulations (RR) No. 2-98, as amended.

The Company is required to file on or before the 15t day of the fourth month following the close

of its accounting period of a Profit and Loss Statement and Balance Sheet with the Annual

Information Return under oath, stating its gross income and expenses incurred during the taxable

year.

8. Finally, the Company's books of accounts and other pertinent records shall be subject to periodic

examination by revenue.enforcement officers of this Bureau for the purpose of ascertaining whether

it is complying with the conditions under which it has been granted tax exemption or tax incentives

and its tax liability, if any, pursuant to Section 235 of the National Internal Revenue Code of 1997,

as amended.

3 An Act Enhancing Transparency in the Management and Accounting of Tax Incentives Administered by Investment

Promotion Agencies. PAGE2OF2