BIR Ruling No. 524-2019

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No.

2019

CERTIFICATE OF TAX EXEMPTON

issued to

PACO CATHOLIC SCHOOL, INC. 1521 Paz St], Brgy. 679, Zone 74, District V, SEC Company Reg. TN: Paco Manila 1007

This certifies that the above-hamed corporation is a non-stock, non-profit corporation 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 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 Iocated within its premise5, owned and operated by PACO CATHOLIC SCHOOL, 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 I 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 SEP 2 7 2J13

. 480

CAESAR R..DULAY

K-1-JAC Commissioner of Internal Revenue 0290.2.2

Paco Catholic School, Inc. Page 2 of 3 Date issuedSEP2 7 201 CTE No. 0524-20}9

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

TAX EXEMPTION

INCOME TAX. PACO CATHOLIC SCHOOL INC. is exempt from the payment of income tax only on revenues and receipts enumerated on the Certificate of Tax Exemption. It is understood that the school must continge to meet the following requisites as set forth under Revenue Memorandum Order (RMO) No 44-20(16, to wit:

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

PACO CATHOLIC SCHOOL, 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 and 15%' tax on interest income under the expanded foreign currency deposit system imposed under Section 27 (D) (1) of the National Internal Revenue Code of|1 997, as amended, subject to compliance with the conditions that as a tax-exempt educational 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 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 utiljzation 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 mafkets, 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 NIRC, PACO CATHOLIC SCHOOL, 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 qperation of cafeterias/canteens, dormitories and bookstores located within the premises of PACO CATHOLIC SCHOOL, INC. are exempt from taxation

provided they are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

INCOME TAX.

PACOCATHOLICSCHOOL INC.is subjecttoincome tax on al 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

Republic Act No. 10963 increased the tax rate from 7.5% to 15% effective January 1, 2018. 2 Department Order No. i49-95 dated November 24, 1995 amending Department Order No. 137-87.

Paco Catholic Schoot, Inc. Page 3 of 3 CTE No...05 Z 4 - 2 0 i 9 Date issued SEP 2 7 201F

National Internal Revenue Code of 1p97, as amended, 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.

} VALUE ADDED TAX/PERCENTAGE TAX

If.PACO CATHOLIC SCHOOL, 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 (P3,000,000.00)3, 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 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.

WITHHOLDING TAX.

PACO CATHOLIC SCHOOL. 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 XIIIf, 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 corporation$ 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

1) PACO CATHOLIC SCHOOL, INd. 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 and Balance Sheet

with the Annual Information Return under oath, stating its gross income and expenses incurred

during the preceding period and a certificate showing that there has not been any change in its By.

laws, Articies of Incorporation, manner of operation and activities as well as sources and disposition

of income. Copy of this Certificate qf Tax Exemption shall be attached to 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 shali be subject to

examination by the BIR for purposes pf ascertaining compliance with the conditions under which it has been granted tax exemptions or tax incentives, and its tax liabilities, if any.

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 Circuiar

No. [RMC] No. 76-2003).

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.

3Republic Act No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,00.00 effective Janua lary l,2018