BIR Ruling No. 315-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No.

St30~0315-2020

CERTIFICATE OF TAX EXEMPTION issued to

BAESA ADVENTIST ELEMENTARY SCHOOL, INC. No. 8 Baesa Road, Brgy. 161, Caloocan City 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 INCOME TAX only on the following revenues or receipts: This certifies that the above-named corporation is a non-stock, non-profit corporation

3. Income derived from operation of cafeterias/canteens, dormitories and 1.Tuition and Other Fees; 2.Donations/Subsidies; and bookstores within its premises, owned and operated by BAESA ADVENTIST ELEMENTARY 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 integral part hereof. It is liable, however, to all other taxes not enumerated above.

conditions herein set forth. It shall likewise be revoked if there are material changes in the for violation of any provisions of applicable rules and regulations of the BIR, or the terms and character, purpose or method of operation of the corporation which are inconsistent with the basis for its income tax exemption. This certification shall be valid from the date of issuance until revoked by this Office

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 ofJUN o 9 2020

1asamue

K- Commissioner of Internal Revenue CAESAR R.DULAY K L 03410

BAESA ADVENTIST ELEMENTARY SCHOOL, CTE No.SH30-0315 - 2 0 20

Page 2 of 4 INC. Date issued-JUN U 9 2U20

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

1) INCOME TAX. BAESA ADVENTIST ELEMENTARY 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 continue to meet the following requisites as set

forth under Revenue Memorandum Order (RMO) No 44-2016, to wit:

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

BAESA ADVENTIST ELEMENTARY 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 1997, 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 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.

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES. Pursuant to Section

109(1)(H) of the National Internal Revenue Code of 1997, as amended BAESA ADVENTIST

ELEMENTARY 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

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

ADVENTIST ELEMENTARY SCHOOL, INC. are exempt from taxation, provided they are

owned and operated by it as ancillary activities.

1 Republic Act (RA) No. 10963 increased the Final withholding tax on Income from 7.5% to 15% effective

2 Department Order No. 149-95 dated November 24, 1995 amending Department Order No. 137-87 January 01,2018

BAESA ADVENTIST ELEMENTARY SCHOOL, INC. CTE No.CH30-03 15 -20 20 Page 3 of 4 Date issued_JUN J 9 2U2U

LIABILITY FOR INTERNAL REVENUE TAXES

1)INCOME TAX

BAESA ADVENTIST ELEMENTARY SCHOOL,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 National Internal Revenue Code of 1997, as amended, on its income derived from any of its

for taxation, unless said revenues are actually, directly and exclusively used for educational purposes. properties, real or personal, or any activity conducted for profit, which income should be returned

2) VALUE ADDED TAX/PERCENTAGE TAX

services in the course of a business pursuit, including transactions incidental thereto, its revenues If BAESA ADVENTIST ELEMENTARY SCHOOL,INC. is engaged in the sale of goods or 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 Three Million Pesos (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, as amended.

3)WITHHOLDING TAX

BAESA ADVENTIST ELEMENTARY 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 XIII, 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 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

1 BAESA ADVENTIST ELEMENTARY SCHOOL, INC. 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, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. Copy of this Certificate of 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 shall be subject to

3 Republic Act (RA) No. 10963 increased the VAT threshold from P1,919,500.00 to P3,000,000.00 effective January 01,2018

BAESA ADVENTIST ELEMENTARY SCHOOL, INC CTE No.9H30-0 315 -20 20

Page 4 of 4 Date issued _ JUN 1 9 2020

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

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 related to the activities for which the Association is registered. (Revenue Memorandum Circular

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

4)Finally, it is subject to the payment of registration fee of Php 500.00 as prescribed in Section 236(B)

of the National Internal Revenue Code of 1997, as amended.