BIR Ruling No. 696-2020

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Quezon City

Certificate of Tax Exemption No:

BOI-LEH6962020

CERTIFICATE OF TAX EXEMPTION

TO ALL WHOM IT MAY CONCERN:

consisting of 476 house and lot units used solely for family home or dwelling purposes, located three (3). years beginning from September 2019 or actual start of commercial withholding tax on its income received directly in connection with its economic and low-cost at Brgy. San Miguel, Mexico, Pampanga. a project duly registered with the Board of Investments (BOI) under Registration No. operations/selling, whichever is earlier, but in no case earlier than the date of registration of "Omnibus Investments Code of 1987" and Section 2.57.5 (B)(2) of Revenue Regulations (RR) No. 2-98, as amended. Identification Number housing project,FIESTA COMMUNITIES MEXICO EXTENSION PHASE 2-A and 2-B, the project with the BOI, pursuant to Executive Order No. 226, otherwise known as the This certifies that FIESTA COMMUNITIES, INCORPORATED with Tax is exempt from income tax and creditable dated September 17, 2019, for a period of

below, or house and lot and other residential dwellings valued at P3,199,200.00 and below, is VAT-exempt pursuant to 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 dwellings2 with selling price of not more than Two Million Pesos (P2,000,000.00). Moreover, the sale by the Company of residential lot valued at P1,919,500.00 and

registered with BOI, if any, including those 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 house and lot units in excess of the 476 house and lot units

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 DEC2 g,2n2n

Mousaniw

K-1 Commissioner of Internal Revenue CAESAR R. DULAY

2 Sale of lot only, regardless of the price, shall be subject to VAT starting January 01, 2021 pursuant to Republic Act (RA) No. 10963. 1 Covered by HLURB License to Sell Nos (212 house and lot / Phase 2-A) and 034219 (264 hc e and lot/Phase2-B 038872

Fiesta Communities, Incorporated Page 2 of 2

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, Fiesta Communities Mexico Extension Phase 2-A and 2-B, consisting of 476 house and lot units used solely for family home or dwelling purposes, located at Brgy. San Miguel, Mexico, Pampanga. Such exemption shall not cover revenues from units with selling price exceeding P2,000,000.00.Moreover, the 476 house and lot units covered by License to Sell Nos. and shall not be sold

for more than P1,700,000.00 per house and lot.

2 In the computation of the project's'ITH, the following shall apply:

Only income generated from the sale of house and lot units (Fiesta Communities Mexico

Extension Phase 2-A and 2-B) with selling price not exceeding P2.0M and used solely for family home or dwelling purposes and not for commercial purposes such as leasing, retail stores, offices, etc. shall be qualified.

a Interest income from in-house financing shall not be considered as revenues generated from

the registered activity.

3. 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.

4 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, deductions, credits or exclusions from the tax

base, as may be provided under E.O. 226, within the periods prescribed under RA 10708's

Implementing Rules and Regulations and Joint Memorandum Circular No. .1-2016 dated

September 01, 2016.

5. The Company shall be constituted as a withholding agent for the government if it acts as

employer and any of its employees receive 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 Nationa

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 15th day of the fourth month following the

close of its accounting period 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.

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 National

Internal Revenue Code of 1997, as amended.

3 An Act Enhancing Transparency in the Management and OACCoUnfine ives Administered by Investment Promotion Agencies.

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