BIR Ruling No. 837-2018

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARI'MENT OF FINANCE Quezon City

Certificate of Tax Exemption No.

837 -2018

CERTIFICATE OF TAX EXEMPTION

issued to

ACADEMIA DE SOPHIA INTERNATIONAL INC. (Formerly: Touch (nternational Schoof of Baguio. Inc.) SEC Company Reg. No. 8. South Drive. Baguio City TIN

INCOME TAX onty on the following revenues or receipts: and has proven by actual operation that its primary purpose is one of those enumerated under Section 30 (H) of the Nationat Internal Revenue Code of 1997. as amended. It is exempt from This certifies that the above-nained corporation is a non-stock, non-profit corporation

Tuition Fees & Other School Related Fees; and Income derived from the operation of cafeterias/canteens, dormitories, exclusively used for educational purposes. and bookstores located within its premises, owned, and operated by Academia De Sophia Internationai, Inc. to be actually, directly, and

nothing follow

integral part hereof. It is liable. however. to all other taxes not enumerated above. subject to the provisions of applicabie BIR rules and reguiations and the tax exemptions. liabilities and responsibitities stated in the Terms and Conditions hereto attached and made an

for violation of any provisions of applicabie rules and regulations of the BIR. or the terms and basis for its incoine tax exemption. 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 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 of_MAY 1 8 2Q18

1880w

S-K-1-LM.4T Commissioner of Internal Reven CAESAR R. DULAY a1'65"4 4

ACADEMIA DE SOPHIA INTERNATIONAL INC Dare issuedMAYI 8 ZU1B CTE NO. 837-201.8

OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

TAX EXEMPTION

I INCOME TAX

Memorandum Order (RMO) No 44-2016, to wit: ACADEMIA DE SOPHiA INTERNATIONAL, INC. is exempt from the payment of income tax only on revenues and receipts enumerated on the Certificate of Tax Exemptiou. It is understood that the school must continue to ineet the following requisites as set forth under Revenue

b) its revenues are actually. directly and exclusively used for educationa! a) It is a non-stock, non-profit educational institution: and purposes.

deposits and yield frorm deposit substitute instruments used actually, directly and exclusively in Revenue District Office concerned an annual information return and duly audited financial statement together with the following: ACADEMIA DE SOPHIA INTERNATIONAL, INC.'s interest income from currency bank pursuance of its purpose as an educational institution, are exempt from the 20% final tax and 15% 27 (D) (1) of the National Internal Revenue Code of 1997. as amended. subject to compliance with the conditions that as a tax-exeinpt educational institution it shall on an annual basis submit to the tax on interest incoine under the expanded foreign currency deposit system imposed under Section

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 t5% tax on interest incone under the expanded foreign currency deposit system imposed by Section 27 (D) (1) of the National Internal Revenue Code of 1997. as ameuded:

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

c) Board Resolution by the school administration on proposed projects (i.e. banks or placed in money markets. on or before the 15th day of the fourth Inonth 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 of equipment. books and the like) to be funded out of the money deposited in

2) VALUE ADDED TAX (VAT) ON EDUCATIONAL SERVICES

assets used in the operation of cafeterias/canteens. dormitories. and bookstores located within the provided they are owned and operated by it as ancillary activities. Pursuant to Section l09(H) of the National internal Revenue Code of 1997. as amended. stock, non-profit educational institution are exempt from VAT. Moreover. revenues derived from premises of ACADEMIA DE SOPHIA INTERNATIONAL, INC., are exempt from taxation ACADEMIA DE SOPHIA INTERNATIONAL, INC.'s gross receipts from operations as a non-

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

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 the ACADEMIA DE SOPHIA INTERNATIONAL, INC. is subject to income tax on aH its

Department Order No. 149-95 dated November 24. 1995 amending Department Order No. t37-87 Republic Act (RA) No. 10963 increased the tax rate from 7.5% to 15% effective January 01. 2018

PAGE 2OF 3

ACADEMIA DE SOPHIA INTERNATIONAL. INC Date issued_MAY 8 2018 CTE NO. 837-2018

National Internal Revenue Code of 1997. as arnended. 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 (VAT)/PERCENTAGE TAX

such saies exceed Three Million Pesos (P3.000.000.00), or to the three percent (3%) percentage tax. if gross receipts do not exceed Three Million Pesos (P3,000.000.00). If ACADEMiA DE SOPHIA INTERNATIONAL, INC. is engaged in the sale of goods or services in the course of a business pursuit. including transactions incidental thereto. its revenues derived therefron shall be subject to the twelve percent (12%) VA'r. in case'the gross receipis from

Notwithstanding that it is a non-stock. non-profit corporation. its purchase of goods or properties or services and importation of goods shall nevertheiess be subject to the l2% VAT pursuant to Sections 106 and 107 of the National Internai Revenue Code of 1997. as amended. 3) WITHHOLDING TAX

Code of 1997, as amended, as implemented by Revenue Regulations No. 2-98. as amended. or if it makes incoine payinents to individuals or corporations subject to the withholding tax pursuant to Section 57 of the National Internal Revenue Code of 1997, as anended, and as implemented by to the withhoiding tax under Section 79 (A). Chapter Xii. Title Il of the National Interna! Revenue Revenue Regulations No. 2-98. as amended. for the government if it acts as an employer and its employees receive compensation income subject ACADEMIA DE SOPHIA IN'TERNATIONAL, INC. shall be constituted as withholding agent

TAXPAYER DUTIES & RESPONSIBILITIES

1) ACADEMIA DE SOPHIA INTERNATIONAL, iNC. is required to file on or before the 15th change in its By-laws. Articles of Incorporation. manner of operation and activities as weli as sources and disposition of income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual Information Return. day of the fourth month folfowing 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

2) Under Section 235 of the Nationai internal Revenue Code of 1997. as amended. any provision of it has been granted tax exeinptions or tax incentives. and its tax liabilities, if any. 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

3) Further. it is also required under Section 6(C) in relation to Section 237 of the National Internal No.{RMC] No. 76-2003). invoices for eacl sale or transfer of merchandise or for services rendered which are not directly related to the activities for which the Association is registered. (Revenue Memorandun Circular Revenue Code of 1997. as amended. to issue duty registered receipts or sales or commercial

4)Finally. it is subject to the payment of registration fee of PhP500.00 as prescribed in Section 236(B) of the National Internal Revenue Code of 1997. as amended.

Republic Act (RA) No.10963 increased the VAT threshold trom P1.919.500.00 to P3.000.000.00 effective January 01. 2018

PAGE 3 OF 3