BIR Ruling No. 276-2020

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No:

BOI-LEH-027-202

CERTIFICATE OF TAX EXEMPTION

TO ALL WHOM IT MAY CONCERN:

withholding tax on its income received directly in connection with its economic and low-cost housing project (vertical), Spring Residences Tower 1West Service Road,Barangay Sun Valley, Paranaque City,consisting of 434 housing units used solely for family home or dwelling purposes, located at West Service Road,Barangay Sun Valley Paranaque City.a dated September 28, 2016, for a period of three (3) years beginning from July 201'% or actuar 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, 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 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 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. 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 4342 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

that the facts are different, then this Certificate shall be considered null and void. documents as represented and submitted. However, if upon investigation, the BIR ascertains This Certificate of Tax Exemption is being issued on the basis of the facts and Issued this day of MAY. 2 6 2020

asc

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

License to Sell No.032336 dated February 3,2017 covers 434 houng units for Spring Residences Tower I and 396 Sale of lot only, regardless of the price, shall be subject to VAT starting January O1, 2021 pursuant to Republic Act (RA) housing units for Spring Residences Tower 2. No. 10963.

SM DEVELOPMENT CORPORATION (Spring Residences Tower 1) Date issued:MAY 2 h 2020 CTE No.: BOI-LEH-276 -Z020

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 I - West Service Road, Barangay Sun Valley Paranaque City,consisting of 434 housing units used solely for family home or dwelling purpoe, located at Wet Service Road,Barangay Sun Valley 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 434 housing units based on the following

schedules/sales revenues:

Year 1 (No. of Units) Voiume 321 (PhP'000) 803,857 Value

Total 2 3 434 2 41 1,086,834 102,673 180,304

3. In the computation of the projects 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,deduictions credits or exclusions from the tax base,as may be provided under E.O.226,within the periods prescribed under RA No.10708s 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 withthe.conditions under which it hasbeen 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.

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

Promotion Agencies. PAGE2OF2