BIR Ruling No. 74-2020

REPUBLICOF THE PHILIPPINES

DEPARTMENT OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

Certificate of Tax Exemption No.

SH-006-2020

CERTIFICATE OF TAX EXEMPTON

issued to

ATENEO DE ILOILO,INC.

Brgy. San Rafael, Mandurriao, Iloilo City

TIN: SEC Company Reg. No.

U 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 entity is a non stoct, non-profit corporation and has

2 3 1. Tuition fees and other miscellaneous school fees; Donations; and Income derived from the operation of cafeterias/canteens.

dormitories and bookstore located within its premises, owned and operated by ATENEO DE ILOILO,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, integral part hereof. It is liable, however, to all other taxes not enumerated above. 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 basis for its income tax ex'emption. 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 JAN 1 6 2020

Aeesana

KI-BKTD Commissioner of Internal Revenue CAESAR R.DULAY 032114

Page 2 of 3 ITENEODE ILOILO, INC. Date Issued: JAN 1 6 ZUZu SE-005-2020

OF THE CERTIFICATE OF TAX EXEMPTION TERMS AND CONDITIONS

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

ATENEO DE ILOILO, 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:

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

ATENEODE ILOMLO, INC.'s interest income from currency bank deposits and yield.fiom deposit substitute inStruments used actually, direetly and exclusively in pursuance of its purpose as-e 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.ATENEO DE ILOILO.

INC.'s gross receipts from operations as a non-stock, non-profit educational institution are exempt

from VAT. Moreover, revenues derived from assets use in the operation of cafeterias/canteens,

dormitories and bookstores located within the premises of ATENEO DE ILOILO, INC. are

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

LIABILITY FOR INTERNAL REVENUE TAXES

D INCOME TAX

ATENEO DE ILOILO,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

Republic Act No.10963 increased the tax rate from7.5% to 15% effective January 1,2018

2 Department Order No. 149-95 dated November 24. 1995 amending Department Order No. 137-87

Page 3 of 3 TENEO DE ILOILO, INC. Date Ssued JAN 1 6 202 S0062020

conducted for profit, which income should be returned for taxation, unless said revenues are actually, directly and exclusively used for educational purposes. the corresponding internal revenue taxes imposed under the National Internal Revenue Code of 1997. as amended, on its income derived from any of its properties, real or personal, or any activity

2) VALUE-ADDED TAX (VAT)/PERCENTAGE TAX

If ATENEO DE ILOILO, INC. is engaged in the sale of goods or services in the course of a (P3,000,000.003) or to the 3% percentage tax, if gross receipts do not exceed P3,000,000.00. 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

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

acts as an employer and its emplbyees receive compensation income subject to the withholding tax ATENEO DE ILOIuOING.hall be constituted as withholding agent for the government if it F

under Section79 (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

National Internal Revenue Code of 1997, as amended, and as implemented by Revenue Regulations' No. 2-98, as amended. payments to individuals or corporations subject to the withholding tax pursuant to Section 57 of the

TAXPAYER DUTIES &RESPONSIBILITIES

1 ATENEO DE ILOILO, 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

examination by the BIR for purposes of ascertaining compliance with the conditions under which

it has been granted tax exemptions or tax incentives, and its tax liabilities, if any.

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 corporation is registered. (Revenue Memorandum Circular

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

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 No.10963 increased the VAT threshold from P1,919,500.00 to P3,000,000.00effective January 1,2018.