BIR Ruling No. 621-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE Quezon City

Certificate of Tax Exemption No. CHao - U62 020

CERTIFICATE OF TAXEXEMPTION

issued to

BUSY BRAINS CREATIVE SCHOOL, INC.

Clark POB Norte, Paniqui Tarlac

SEC Company Reg. No. TIN:

has proven by actual operation that its primary purpose is one of those enumerated under Section TAX only on the following revenues or receipts: 30(H) of the National.Internal Revenue Code of 1997, as amended. It is exempt from INCOME This certifies that the above-named corporation is a non-stock, non-profit corporation and

1. Tuition and Miscellaneous Fees; and 2. Income. derived from the operation of cafeterias/canteens, dormitories and CREATIVE SCHOOL, INC., to be actually, directly and exclusively used for bookstores located within its premises, owned and operated by BUSY BRAINS 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.

conditions herein set forth. It shall likewise be revoked if there are material changes in the violation: of any provisions of applicable rules and regulations of the BIR, or the terms and character, purpose or method'of operation of the corporation which are inconsistent with the basis This certification shall be valid from the date of issuance until revoked by this Office for

for its income tax exemption.

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 documents

Issued this day of OCT 2 8 2u20

iaeay

CAESAR R.DULAY Commissioner of Internal Revenue

037301

BUSY BRAINS CREATIVE SCHOOL, INC. Page 2 of 3 CTE No. SH30 - 0 6 21 - 2 0 20 Date issued_OCT 2 8 Zus

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. 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: BUSY BRAINS CREATIVE SCHOOL, INC. is exempt from the payment of income tax

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

with the conditions that as a tax-exempt institution it shall on an annual basis submit to the 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 Revenue District Office concerned an annual information return and duly audited financial statement together with the following: 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 BUSY BRAINS CREATIVE SCHOOL,INC.'s interest income from currency bank

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 construction and/or improvement of school buildings and facilities, acquisition Board Resolution by the school administration on proposed projects (i.e., 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 of equipment, books and the like) to be funded out of the money deposited in No. 137-87)2.

VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES. within the -premises of BUSY BRAINS CREATIVE SCHOOL, INC. are-exempt from taxation provided they are owned and operated by it as ancillary services. BUSY BRAINS CREATIVE 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 Pursuant to Section 109(1)(H) of the National Internal Revenue Code of 1997, as amended.

LIABILITY FOR INTERNAL REVENUE TAXES 1) INCOME TAX be returned for taxation, unless said revenues are actually, directly and exclusively used for BUSY BRAINS CREATIVE SCHOOL, INC. is subject to income tax on all its under National Internal Revenue Code of 1997, as amended, on its income derived from any 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 of its properties, real or personal, or any activity conducted for profit, which income should educational purposes.

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

Page 3 of 3 BUSY BRAINS CREATIVE SCHOOL, INC. Date isued_OCT 2 8 222 CTENo. SH30 - 0 6 21 - 2 0 2 0

2) VALUE ADDED TAX/PERCENTAGE TAX in the course of a 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 If BUSY BRAINS CREATIVE SCHOOL, INC. is engaged in the sale.of goods or services exceed Three Million Pesos (P3,000,000.00)3, 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 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

3 WITHHOLDING TAX

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

TAXPAYER DUTIES & RESPONSIBILITIES 1) BUSY BRAINS CREATIVE SCHOOL, INC., is required to file on or before the 15th day been any change in its By-laws, Articles of Incorporation, manner of operation and activities be attached to the aforementioned Annual Information Return. 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 as well as sources and disposition of income. Copy of this Certificate of Tax Exemption shall and expenses incurred during the preceding period and a certificate showing that there has not

2) Under Section 235 of the National, Internal Revenue Code of 1997, as amended, any 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. 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

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 Memorandum Circular No. [RMC] No. 76-2003). 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

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. 1. 2018