BIR Ruling No. 401-2020

REPUBLIC OF THE PHILIPPINES

BUREAU OHUNTERNANL REVENUE DEPARTMENT OF FINANCE

Certificate of Tax Exemption No.

SH70-0401-2020

CERTIFICATE OF TAX EXEMPTION

issued to

SPRING OF WISDOM EDUCATION CENTER,INC.

B18 L17 ACM Homes Woodstock, Sanja Mayor, Tanza, Cavite 4108 SEC Company Reg. No. TIN:

and 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 This certifies that the above-named corporation is a non-stock, non-profit corporation

INCOME TAX only on the following revenues or receipts:

1.Tuition fees and Other school fees; and

2 Income derived from the operation of cafeterias/canteens, dormitories and

bookstores located within its premises, owned and operated by SPRING OF WISDOM EDUCATION CENTER, 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.

This certification shall be valid from the date of issuance until revoked by this Office

for violation of any provisions of applicable rules and regulations of the BIR, or the terms and

conditions herein set forth. It shall likewise be revoked if there are material changes in the

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

aeran1wa

CAESAR R. DULAY

K-1-JAC Commissioner of Internal Revenue 035799 Q

cation Center, Inc. CTE No. SH30 0 4 0 1 - 2 0 20 Date issued

TERMS AND CONDITIONS

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

TAX EXEMPTION

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

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

SPRING OF WISDOM EDUCATION CENTER,INC.'s interest income from currency bank

pursuance of its purpose as an educational institution, are exempt from the 20% final tax and 15% deposits and yield from deposit substitute instruments used actually, directly and exclusively in

tax on interest income 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 compliance with

Revenue District Office concerned an annual information return and duly audited financial the conditions that as a tax-exempt educational institution it shall on an annual basis submit to the

statement together with the following:

(a)Certification from their depository banks as to the amount of interest income earned from passive investment not subject to the 20% final withholding tax and 15% tax on interest income under the expanded foreign currency deposit

system imposed by Section 27 (D) (1) of the National Internal Revenue Code

of 1997, as amended;

(b)Certification of actual utilization of the said income; and

(c)Board Resolution by the school administration on proposed projects (i.e..

construction and/or improvement of school buildings and facilities, 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) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to Section

109(1)(H) of the National Internal Revenue Code of 1997, as amended, SPRING OF WISDOM

EDUCATION CENTER, INC.'s gross receipts from operations as a non-stock, non-profit

educational institution is exempt from VAT. Moreover, revenues derived from assets used in the

operation of cafeterias/canteens, dormitories and bookstores located within the premises of

SPRING OF WISDOM EDUCATION CENTER, INC., are exempt from taxation provided they

are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

1INCOME TAX.

SPRING OF WISDOM EDUCATION CENTER, 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

Q

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

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

ucation Center, Inc. CTE No. SH30-0 40 1 - 20 20

Date issued

National Internal Revenue Code of 1997, as ametded, on its income derived from any of its properties, real or personal, or any activity conducted for profit, which income should be returned for taxation, unless said revenues are actually, directly and exclusively used for educational purposes.

2) VALUE ADDED TAX/PERCENTAGE TAX

If SPRING OF WISDOM EDUCATION CENTER, INC., is engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, its revenues P3,000,000.00. derived therefrom shall be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (P3,000,000.00)3, or to the 3% percentage tax, if gross receipts do not exceed

Notwithstanding that it is a non-stock, non-profit corporation, its purchase of goods or properties or services and importation of goods shall nevertheless be subject to the 12% VAT pursuant to Sections 106 and 107 of the National Internal Revenue Code of 1997, as amended.

3) WITHHOLDING TAX.

Revenue Code of 1997, as amended, as implemented by Revenue Regulations No. 2-98, as SPRING OF WISDOM EDUCATION CENTER, 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 amended, or if it makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the National Internal Revenue Code of 1997, as amended, and as implemented by Revenue Regulations No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

SPRING OF WISDOM EDUCATION CENTER, INC., is required to file on or before the 15th sources and disposition of income. Copy of this Certificate of Tax Exemption shall be attached to day of the fourth month following the end of the accounting period a Profit and Loss Statement and expenses incurred during the preceding period and a certificate showing that there has not been any change in its By-laws, Articles of Incorporation, manner of operation and activities as well as Balance Sheet with the Annual Information Return under oath, stating its gross income and the aforementioned Annual Information Return.

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

No. [RMC] No. 76-2003). related to the activities for which the Association is registered. (Revenue Memorandum Circular

4)Finally, it is subject to the payment of registration fee of P500.00 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 P1,919,500.00to P3.000.00000 effective January I. 2018