BIR Ruling No. 462-2019

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

Certificate of Tax Exemption No.

0462-201S

CERTIFICATE OF TAX EXEMPTON

issued to

ASBURY COLLEGE, INC. Poblacion Anda, Pangasinan 2405 SEC Company Reg. No. TIN:

INCOME TAX only 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 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. Tuition fees and other school fees; and 2 Income derived from the operation of cafeterias/canteens, dormitories and bookstores

actually, directly and exclusively used for educational purposes. located within its premises, owned and operated by'ASBURY COLLEGE, INC., to be

nothing follows

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 subject to the provisions of applicable BIR rules and regulations and the tax exemptions.

basis for its income 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 for violation of any provisions of applicable rules and regulations of the BIR, or the terms and 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 AUG 3 0 2019

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K-1-JAC Commissioner of Internal Revenue] CAESAR R. DULAY H 028062

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Page 2 of 3 Asbury College, Inc. CTE No. 0 4 6 2 - 2 0 1 9 Date issued_AUG_3 0 2015

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. ASBURY COLLEGE, 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:

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

ASBURY COLLEGE, 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

Internal Revenue Code of 1997, as amended, subject to compliance with the conditions that as a 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

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.j 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 NIRC, ASBURY COLLEGE, INC.'s gross receipts from operations as a non- stock, non-profit educational institution is exempt from VAT. Moreover, revenues derived from

assets used in the operation of cafeterias/canteens, dormitories and bookstores located within the premises of ASBURY COLLEGE, INC. are exempt from taxation provided they are owned and operated by it as ancillary activities.

LIABILITY FOR INTERNAL REVENUE TAXES

1)INCOME TAX.

ASBURY COLLEGE, INC. is subject to income tax on all its income/receipts/revenues not expressiy exempted and stated in the Certificate of Tax

: Republic Act No. 10963 increased the tax rate from 7.5% 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 Asbury College, Inc. Date issued AUG 3 0 2019 CTE No. 0462-201

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/PERCENTAGE TAX

(P3,000,000.00)3, or to the 3% percentage tax, if gross receipts do not exceed P3,000,000.00. If ASBURY COLLEGE, INC. is engaged in the sale of goods or services in the course of a subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos business pursuit, including transactions incidental thereto, its revenues derived therefrom shall be

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.

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 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. ASBURY COLLEGE, INC. shall be constituted as withholding agent for the government if it acts

No. 2-98, as amended.

TAXPAYER DUTIES & RESPONSIBILITIES

1} ASBURY COLLEGE, INC. is required to file on or before the 15th day of the fourth month income. Copy of this Certificate of Tax Exemption shall be attached to the aforementioned Annual 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 Articles of Incorporation, manner of operation and activities as well as sources and disposition of preceding period and a certificate showing that there has not been any change in its By-laws.

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 shall be subject to examination by the BIR for purposes of ascertaining compliance with the conditions under which existing general and special law to the contrary notwithstanding, the books of accounts and other 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

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). Revenue Code of 1997, as amended, to issue duly registered receipts or sales or commercial

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.

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