BIR Ruling No. 682-2020

REPUBLIC OF THEPHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE Quezon City

Certificate of Tax Exemption No. SH30-682 -2020 DEC 2 9 2020

CERTIFICATE OF TAX EXEMPTION

issued to

Acupanda Street, Poblacion. Zamhoanguita Negros Oriental 6218 DECOR CARMELI ACADEMY, INC. TIN:

SEC Company Reg. No!

has proven by actual operation that its primary purpose is one of those enumerated under Section 30(H) of the National Internal Revenue Code of 1997, as amended. It is exempt from INCOME TAX only on the following revenues or receipts: 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

bookstores located within its premises, owned and operated by DECOR CARMELI ACADEMY INC., to be actually, directly and exclusively used for 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 reyoked if there are material changes in the violation of any provisions of applicable rules and regulations of the BIR, or the terms and This certification shall be valid from the date of issuance until revoked by this Office for

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 DEC 2 9 2020

1eesa1u

CAESAR R.DULAY

K-1 Commissioner of Internal Revenue 039067

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Page 2 of 3 DECOR CARMELI ACADEMY, INC. CTE No. Date issued SH0-682-2020 DEC 2 9 2020

TERMS AND CONDITIONS OF THE CERTIFICATE OF TAX EXEMPTION under Section 30(H) of the National Internal Revenue Code of 1997, as Amended For Non-Stock, Non-Profit Educational Institution

TAX EXEMPTION 1) INCOME TAX. understood that the school must continue to meet the following requisites as set forth on revenues and receipts enumerated on the Certificate of Tax Exemption. It is under Revenue Memorandum Order (RMO) No 44-2016, to wit: DECOR CARMELI ACADEMY, INC. is exempt from the payment of income tax only

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

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

(a Certification from their depository bank as to the amount of interest income

deposit system imposed by Section27(D)(1) of the National Internal earned from passive investment not subject to the 20% final withholding tax and 15% tax on interest income under the expanded foreign currency

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, Board Resolution by the school administration on proposed projects (i.e. acquisition 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)2.

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES.

Pursuant to Section 109(1)(H) of the National Internal Revenue Code of 1997, as amended, DECOR CARMELI ACADEMY, 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 within the premises of DECOR CARMELI ACADEMY, INC. are

exempt from taxation provided they are owned and operated by it as ancillary services.

LIABILITY FOR INTERNAL REVENUE TAXES 1) INCOME TAX

DECOR CARMELI ACADEMY, INC. is subject to income tax on all its

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

Republic Act No. 10963 increased the tax rate from 7.5% to 15% effective Jan. 1, 2018

2 Department Order No. 149-95 dated November 24, 1995 amending Department Order No. 137-87

Page 3 of 3 DECOR CARMELI ACADEMY, INC. should be returned for taxation, unless said revenues are actually, directly and exclusively any of its properties, real or personal, or any activity conducted for profit, which income used for educational purposes. Date issued CTE No. CH30-682 -2020 DEC 2 g 2020

2) VALUE ADDED TAX/PERCENTAGE TAX If DECOR CARMELI ACADEMY, 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 be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (P3,000,000.003, 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 VAT pursuant to Sections 106 and 107 of the National Internal Revenue Code of 1997, as properties or services and importation of goods shall nevertheless be subject to the 12% amended.

3)WITHHOLDING TAX DECOR CARMELI ACADEMY, 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 Code of 1997, as amended, and as implemented by Revenue Regulations No. 2-98, as subject to the withholding tax pursuant to Section 57 of the National Internal Revenue

amended.

TAXPAYER DUTIES & RESPONSIBILITIES 1) DECOR CARMELI ACADEMY,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

income and expenses incurred during the preceding period and a certificate showing that and Balance Sheet with the Annual Information Return under oath, stating its gross

there has not been any change in its By-laws, Articles of Incorporation, manner of

Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return. operation and activities as well as sources and disposition of income. Copy of this

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

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.

3 Republic Act No. 10963 increased the VAT threshold from P1,919,50000 to P3,000,00000 effective Jan. 1, 2018 Y