BIR Ruling No. 305-2018

+ . REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE Quezon City

Certificate of Tax Exemption No.

305-2018

CERTIFICATE OF TAX EXEMPTION

issued to

SOUTHERN MINDANAO COMPUTER COLLEGE, INC. : SEC Company Keg. No. Del Pilar Street, Digos City 8002 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

1 Tuition Fees & Other School Related Fees; and Income derived from the operation of cafeterias/canteens, dormitories.

Southern Mindanao Computer College, Inc. to be actually, directly, and exclusively used for educational purposes. and bookstores located within its premises, owned, and operated by

nothing follows

integral part hereof. It is liable, however, to all other taxes not enumerated above. 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

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

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 ofMAR 05.2018

Z K-I-LMAT Commissioner of Internal Revenue CAESAR R. DULAY 0139 61

SOUTHERN MINDANAO COMPUTER COLLEGE, INC. CTE No. 305-2018 Date issued _3-5-2018

QF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

EXEMPTION

L) INCOME TAX

SOUTHERN MINDANAO COMPUTER COLLEGE, INC. is exempt from the payment of 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: income tax only on revenues and receipts enumerated on the Certificate of Tax Exemption. It

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

purposes.

basis submit to the Revenue District Office concerned an annual informatioi return and duly audited 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 financial statement together with the following: bank deposits and yield from deposit substitute instruments used actually, directly and exclusively SOUTHERN MINDANAO COMPUTER COLLEGE, INC.'s interest income from currency

a) Certification from their depository banks as to the amount of interest income of 1997, as amended; earned from passive investment not subject to the 20% final withhoiding 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

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

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

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 construction and/or improvement of school buildings and facilities, acquisition

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES

taxation provided they are owned and operated by it as ancillary activities. SOUTHERN MINDANAO COMPUTER COLLEGE, INC.'s gross receipts from operations as a non-stock, non-profit educational institution are exempt from VAT. Moreover, revenues derived from assets used in the operation of cafeterias/canteens, dormitories, and bookstores located within the premises of SOUTHERN MINDANAO COMPUTER COLLEGE, INC., are exempt from Pursuant to Section 109(H) of the National Internal Revenue Code of 1997, as amended,

LIABILITY FOR INTERNAL REVENUE TAXES

I) INCOME TAX

income/receipts/revenues not expressly exempted and stated in the Certificate of Tax Exemption. Moreover, it is subject to the cotresponding internal revenue taxes imposed under the SOUTHERN MINDANAO COMPUTER COLLEGE, INC. is subject to income tax on alI its

2 Department Order No. 149-95 dated November 24, 1995 amending Department Order No. 137-87. : Republic Act (RA) No. 10963 increased the tax rate from 7.5% to 15% effective January 01, 2018.

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SOUTHERN MINDANAO COMPUTER COELEGE, INC. Date issued 3--5.--2018 CTE No.305-208

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

2) VALUE ADDED TAX (VAT)/PERCENTAGE TAX

If'SOUTHERN MINDANAO COMPUTER COLLEGE, INC. is engaged in the sale of goods r services in the course of a business pursuit, including transactions incidental thereto, its revenues

tax, if gross receipts do not exceed Three Million Pesos (P3,000,000.00). such sales exceed Three Million Pesos (P3,000,000.00)3, or to the three percent (3%) percentage derived therefrom shall be subject to the twelve percent (12%) VAT, in case the gross receipts from

Sections 106 and 107 of the National Internal Revenue Code of 1997.:as amended 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

3) WITHHOLDING TAX

SOUTHERN MINDANAO COMPUTER COLLEGE,INC. shall be constituted as withho{ding

subject to the withholding tax under Section 79 (A), Chapter XIII, Title II of the National Internaf Revenue Code of 1997, as amended, as implemented by Revenue Regulations No. 2-98, as amended, or if it makes income payments to individuais or corporations subject to the withholding agent for the government if it acts as an employer and its employees receive compensation income

implemented by Revenue Regulations No. 2-98, as amended. tax pursuant to Section 57 of the National Internal Revenue Code of 1997, as amended, and as

TAXPAYER DUTIES & RESPONSIBILITIES

1) : SOUTHERN MINDANAO COMPUTER COLLEGE, INC. is required to file on or before the 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 expenses incurred during the preceding period and a certificate showing that there has not been any 1 5th 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

the aforementioned Annual Information Return.

2) Under Section 235 of the National Internal Revenue Code of 1997, as amended, any provision of pertinent records of tax-exempt organization or grantees of tax incentives shalt be subject to 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 existing general and special law to the conttary notwithstanding. the books of accounts and other

3) Further, it is also required under Section 6(C) in relation to Section 237 of the National (nternal 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 PhP 500.00 as prescribed in Section 236(B) of the National Internal Revenue Code of 1997, as amended.

SK-I-LMAT

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

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