BIR Ruling No. 277-2020

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No:

BOI-LEH- 0277-2020

CERTIFICATE OF TAX EXEMPTION TO ALL WHOM IT MAY CONCERN

dated January 13, 2017, for a period of three (3) years beginning from December 2017 or actual start of commercial operations/selling, whichever is earlier, but in no case earlier than the date of registration of the project with the BOI, pursuant to Executive Order (EO)No. 226 withholding tax on its income received directly in connection with its economic and low-cost housing project (vertical), Spring Residences Tower 2West Service Road, Barangay Sun ValleyParanaque City,consisting of 396 housing units used solely for family home or dwelling purposes, located at West Service Road, Barangay Sun Valley, Paranaque Citv. a otherwise known as the *Omnibus Investments Code of 1987 and Section 2.57.5 (B) (2) of project duly registered with the Board of Investments (BOI) under Registration No. Revenue Regulations (RR) No. 2-98, as amended. Identification Number (TIN) This certifies that SM DEVELOPMENT CORPORATION, with Taxpayers , 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 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 Internal Revenue Code of 1997, as amended. Provided, however, that beginning January 01, 2021, the Moreover, the sale by the Company of residential lot valued at P1,919,500.00 and

the BOI, if any, as well as the 1 commercial unit and 305 parking slots, including those other units used for commercial purposes such as leasing, retail stores, offices, etc., shall be subject to the payment of appropriate taxes under the National Internal Revenue Code of 1997, as amended. However, the sale of housing units in excess of the. 3962 housing units registered with

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 of MAY 2 6 2020

K-1-LMAT Commissioner of Internal Revenue ea CAESAR R.DULAY 035094

Sale of lot nly, regardlss of the price,shll be subject to VAT starting January 01, 2021 pursuant to Republic Act (RA) icene tSll No.032336atedFebrary3,207 covers 396housing unts for Spring Reidence Tower 2and434 housing units for Spring Residences Tower 1. No. 10963.

SM DEVELOPMENT CORPORATION (Spring Residences Tower 2) Date issued: MAY "2"6 2020 CTE No.: BOILEH- 0277-2020

OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

1 The exemption from income and creditable withholding taxes covers only income directly attributable to the revenues generated from the project, Spring Residences Tower 2 - West for family home or dwelling purposes, located at West Service Road, Barangay Sun Valley, Service Road, Barangay Sun Valley, Paranaque City, consisting of 396 housing units used solely Paranaque City. Such exemption shall not cover revenues from units with selling price exceeding P3,000,000.00.

2. The Company is. obligated to construct and sell 396 housing units based on the following schedules/sales revenues:

Year (No. of Units) Volume (PhP'000) Value

60 155,724 2 8 230,991

3 247 641,064 Total 396 1,027,779

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 provision's 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

Revenue Code of 1997, as amended, using the electronic system for filing and payment of taxes of returns and pay'its tax liabilities,on or before the deadline as provided under the National Internal

incentivesVATand 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 the BIR.It shall file'with BOI a complete 'annual tax incentives report of its income-based tax Rules and Regulations and Joint Memorandum Circular No. 1-2016 dated September 1, 2016.

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

7.The Company is required to file on or before the 15th 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. and its tax liability,.if any, pursuant to Section 235 of the National Internal Revenue Code of 1997, Finally, the Company's.books of accounts and other pertinent records shall be subject to periodic it is complying with theconditions under which it has been granted tax exemption or tax incentives as amended. examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether

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

Promotion Agencies.

PAGE2OF2