BIR Ruling No. 562-2020

REPUELIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No:

BOI-LEH-0562-22

CERTIFICATE OF TAX EXEMPTION

TO ALL WHOM IT MAY CONCERN:

Identification Number (TIN) This certifies that SM DEVELOPMENT CORPORATION, with Taxpayers , is exempt from income tax and creditable withholding tax on its income received directly in connection with its economic and low-cost housing project (vertical), Charm Residences Phase 1 (Towers A, D & E) -- Imelda Ave. San Isidro (Sto. Domingo), Cainta, Rizal, consisting of family home or dwelling purposes, located at Imelda Ave., San Isidro (Sto. Domingo), Cainta. Rizal, a project duly registered with the Board of Investments (BOI) under Registration No. 01, 2018 to November 30, 2022, pursuant to Executive Order (EO) No. 226, otherwise known (RR) No. 2-98, as amended, provided that the selling price of said residential units does not exceed P3,000,000.00' per residential unit. as the Omnibus Investments Code of 1987 and Section 2.57.5 (B)(2) of Revenue Regulations dated December 20, 2017, for a period of four (4) years beginning from December residential units used solely for

exemption from VAT shall only apply to sale of house and lot and other residential dwellings? below, or house and lot and other residential dwellings valued at P3,199,200.00 and below, is Revenue Code of 1997, as amended. Provided, however, that beginning January 01, 2021, the 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 Moreover, the sale by the Company of residential lot valued at P1,919,500.00 and

appropriate taxes under the National Internal Revenue Code of 1997, as amended. with the BOI (per License to Sell No. residential units), as well as the 254 parking slots, including those units used for commercial purposes such as leasing, retail stores, offices, etc., shall be subject to the payment of However, the sale of residential units in excess of the dated November 14, 2018, the excess is 48 residential units registered

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.

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. OCT Q 1 2020

1eea

K-1-LMAT Commissioner of Internal Revenue CAESAR R.DULAY 036832

Sale of oony reardsfthe prill be subjt toAT sarting January 1,201puruant to Republic Act (RA Per Certification dated June 25, 2020 issued by the BOI. No. 10963.

(Charm Residences Phase I (Towers A, D & E) SM DEVELOPMENT CORPORATION Date issued: CTE No.: UCT U T 2U2U BOLLEH0562-22

OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

hThe exemption from income and creditable withholding taxes covers only income directly (Sto. Domingo), Cainta, Rizal. Such exemption shall not cover revenues from units with selling attributable to the revenues generated from the project, Charm Residences Phase 1 (Towers A, D & E) -- Imelda Ave., San Isidro (Sto. Domingo), Cainta, Rizal, consisting of units used solely for family home or dwelling purposes, located at Imelda Ave., San Isidro price exceeding P3,000,000.00. residential

2. The Company is obligated to construct and sell 1,313 residential units based on the following schedules/sales revenues:

Year (No. of Units) Volume 200 (in PhP000) Value

2 600 3 383

A 130 Total 1,313

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 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

be provided under E.O. 226, within the periods prescribed under RA No. 10708's Implementing 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 Rules and Regulations and Joint Memorandum Circular No. 1-2016 dated September 1, 2016. returns and pay its tax liabilities, on or before the deadline as provided under the National Internal

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

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. and any of its employees received compensation income subject to compensation withholding tax,

T 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

and its tax liability, if any, pursuant to Section 235 of the National Internal Revenue Code of 1997, 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 as amended.

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

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