BIR Ruling No. 347-2017

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City.

Certificate of Tax Exemption No.

8/02/2017 #347-2017

CERTIFICATE OF TAX EXEMPTION

issued to

SACRED HEART SCHOOL OF BUTUAN,INC.

J.C. Aquino, Butuan City

SEC Company Reg. No TIN

This certifies that the above-named entity is a non-stock, non-profit corporation 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:

1) Tuition fees, matriculation fees and miscellaneous fees;

2 3 Income derived from the operation of cafeterias/canteens Auxiliary income from pupils' uniforms and supplies; and bookstores located within its premises, owned and

operated by SACRED HEART SCHOOL OF BUTUAN,

INC. to be actually, directly and exclusively used for

educational purposes; and 4 Donations. 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.

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

for violation of any provisions of applicable rules and regulations of the BIR, or the terms and

conditions herein set forth. It shali 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 Certificate of Tax Exemption is being issued on the basis of the facts and

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.

Issued this. day of AUG 02 2017

1930

CAESAR R.DULAY Commissioner of Internal Revenue 008275 K-1-RFR

Sacred Heart School of Butuan, Inc. Page 2 of 4 Date Issued: 8/02/2017 CTE No. 347--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

SACRED HEART SCHOOL OF BUTUAN,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.

SACRED HEART SCHOOL OF BUTUAN, 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) Ce-tification from their depository banks as to the amount of interest

income earned from passive investment not subject to the 20% fina 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(1)(H) of the National Internal Revenue Code of 1997, as amended, SACRED HEART

SCHOOL OF BUTUAN,INC.'s gross receipts from operations as a non-stock, non-profit

educational institution are exempt from VAT.

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

Sacred Heart School of Butuan, Inc. Page 3 of 4 Date Issued:8/02/2017 CTE No. 347-2017

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

SACRED HEART SCHOOL OF BUTUAN 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 the National Internal Revenue Code of 1997, as amended, 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)

If SACRED HEART SCHOOL OF BUTUAN,INC, is engaged in the sale of goods or

services in the course of a business pursuit, including transactions incidental thereto, in

general, it shall be liable for VAT on the revenues derived therefrom.

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 of 1997, as

amended

3) WITHHOLDING TAX

SACRED HEART SCHOOL OF BUTUAN, 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

SACRED HEART SCHOOL OF BUTUAN 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. N

Sacred Heart School of Butuan, Inc. Page 4 of 4 Date Issued: _8/02/2017 CTE No._347-2017

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).

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