BIR Ruling No. 635-2017

Page 2 of 3 De La Salle Lipa, Ine. Date issued 12-19-2017 CTE No. 635-2017

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.DE LA SALLE LIPA,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:

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

DE LA SALLE LIPA, 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 7 1/2% 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 7 1/2% 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(H)

of the NIRC, DE LA SALLE LIPA, INC.'s gross receipts from operations as a non-stock, non- profit educational institution are exempt from VAT.

LIABILITY FOR INTERNAL REVENUE TAXES

1 INCOME TAX from any of its properties, real or personal, or any activity conducted for profit, which income expressly exempted and stated in the Certificate of Tax Exemption. Moreover, it is subject to the corresponding internal revenue taxes imposed under NIRC, as amended, on its income derived DE LA SALLE LIPA, INC. is subject to income tax on all its income/receipts/revenues not

Page 3 of 3 De La Salle Lipa, Inc. Date issued 12-19-20 17 CTE No.635-2017

should be returned for taxation, unless said revenues are actully, directly and exclusively used for educational purposes.

2) VALUE ADDED TAX/PERCENTAGE TAX

Thousand Five Hundred Pesos (P1,919,500.00), or to the 3% percentage tax, if gross receipts do not exceed P1,919,500.00. IfDE LA SALLE LIPA, 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 is One Million Nine Hundred Nineteen

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 NIRC.

3)WITHHOLDING TAX

Section 79 (A), Chapter XIII, Title II of the NIRC, as implemented by Revenue Regulations No. 2- No. 2-98, as amended. DE LA SALLE LIPA, INC. shall be constituted as withholding agent for the government if it acts 98. as amended. or if it makes income payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the NIRC, and as implemented by Revenue Regulations as an employer and its employees receive compensation income subject to the withholding tax under

TAXPAYER DUTIES & RESPONSIBILITIES

1) DE LA SALLE LIPA, INC. is required to file on or before the 15th day of the fourth month Information Return. preceding period and a certificate showing that there has not been any change in its By-laws. income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual 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 Articles of Incorporation, manner of operation and activities as well as sources and disposition of

3) Further, it is also required under Section 6(C) in relation to Section 237 of the National Internal 2) Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision of it has been granted tax exemptions or tax incentives, and its tax liabilities, if any. 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). 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 Revenue Code of 1997, as amended, to issue duly registered receipts or sales or commercial

4)Finally, it is subject to the payment ofregistration fee of PhP 500.00 as prescribed in Section 236(B) of the National Internal Revenue Code of 1997, as amended.