BIR Ruling No. 589-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No POI-iEH-058g-202Q

CERTIFICATE OF TAX EXEMPTON

TO ALL WHOM IT MAY CONCERN:

This certifies that TRADITION HOMES, INC., with Taxpayer Identification Number

, is exempt from income tax and creditable withholding tax on its income received directly in connection with its economic and low-cost housing project, Southview Homes -- Santa Rosa, consisting of 261 housing units used solely for family home or dwelling

purposes, located at Brgy. Ibaba, Sta. Rosa City, Laguna, a project duly registered with the

Board of Investments (BOI) under Registration No. dated March 06, 2019, for a

period of 4 years beginning from March 06, 2019 to March 05, 2023, pursuant to Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987" and Section 2.57.5 (B)(2) of Revenue Regulations No. 2-98, as amended.

Moreover, the sale by the Company of residential lot valued at P1,919,500.00 and below, or house and lot and other residential dwellings valued at P3,199,200.00 and below, is

VAT-exempt under Section 109(1)(P) of the 1997 Tax Code, as amended. Provided, however,

that beginning January 1, 2021, the VAT exemption shall only apply to sale of house and lot and other residential dwellings' with selling price of not more than Two Million Pesos

(P2,000,000.00).

The sale of house and lot units in excess of the.261 housing units, including those units used for.commercial purposes such as leasing retail stores,officesetc.. are not covered by.this

Certificate of Tax Exemption and shall be subject to applicable taxes under the 1997 Tax Code.

as amended.

The grant of tax exemption herein is subject to the compliance with the provisions of 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.

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 OCT 0 6 2020

uoeaww

CAESAR R. DULAY Commissioner of Internal Revenue

K 036840

1 Sale of lot only, regardless of the price, shall be subject to VAT starting January 01, 2021 pursuant to RA No. 10963.

Tradition Homes, Inc./Southview Homes -- Santa Rosa Page 2 of 2 CTE No.D0(-LEH-05 89 -2028 Date issued OCT"0 6 2020]

OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

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

attributable to the revenues generated from the project, Southview Homes -- Santa Rosa consisting of 261 house and lot units, located at Brgy. Ibaba, Sta. Rosa City, Laguna. Such exemption shall not cover revenues from units with selling price exceeding P2,000,000.00. Moreover, the 261 house and lot units per HLURB License to Sell No. for more than P1,700,000.00 per house & lot package. shall not be sold

2.enterprise shall observe the project timetable:

Activity Period

Land acquisition February 2016 - July 2017 Secure necessary license/permit/registration from the government/training costs May 2016 to March 2018

Site preparation and development July 2016 to October 2018

Building/House construction August 2018 to August 2022 Start of Commercial Operations March 2019

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.

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.

Pursuant to Section 4 of Republic Act (RA) No. 107082, the Company is required to

file its tax returns and pay its tax liabilities, on or before the deadline as provided under the 1997.Tax.Code, as amended, using the electronic.system for filing and.payment of taxes of the BIR. It shall file with BOIa complete annualtaxincentives report of its income-basedtaxincentives,VATanddutyexemptions,deductions,ucredits or exclusions from the tax base, as may be provided under E.O. 226, within the periods prescribed under R.A. 10708's Implementing Rules and Regulations and Joint Memorandum Circular No. 1-2016 dated September 1, 2016.

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 Tax 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 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. 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 Tax Code of 1997, as amended.

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

Promotion Agencies.