BIR Ruling No. 318-2017

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No. 318-2017

CERTIFICATE OF TAX EXEMPTION

issued to

SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU,INC

J.P. Rizal Street, Poblacion, Talisay City, Cebu 6045

SEC Company Reg. No. TIN:

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

1. Donations and Grants.

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.

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

basis for its income tax exemption. character, purpose or method of operation of the corporation which are inconsistent with the

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

1a0

Commissioner of Internal Revenue CAESAR R.DULAY

K-1/spf 007118

Sisters of Mary Technical Educational Institute Cebu, Inc. Page 2 cf 3 Date issued 6-- 1+-201? CTE No. 318.-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.

SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU, 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:

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

SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU, 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 iimprovement 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 moncy markets, on or before the 1 5th 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 NIRC,SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU, INC.s gross receipts from operations as a non-stock, non-profit educationa! institution is exempt from VAT

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

Sisters of Mary Technical Educational Institute Cebu, Inc. Page 3 of 3 Date issued 614-2017 CTE No. 3182017

LIABILITY FOR INTERNAL REVENUE TAXES

1) INCOME TAX

SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU,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 NIRC, 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

If SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU,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 NIRC.

3)WITHHOLDING TAX

SISTERS OF MARY TECHNICAL EDUCATION.INSTITUTE CEBU,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 NIRC, 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 NIRC, and as implemented by Revenue Regulations No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

1) SISTERS OF MARY TECHNICAL EDUCATION INSTITUTE CEBU,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

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. pertinent records of tax-exempt organization or grantees of tax incentives shall be subject to

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 Association is registered. (Revenue Memorandum Circular No. [RMC] No. 76-2003).

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.