Federal Land, Inc.

July 16, 2020 CERTIFICATE OF TAX EXEMPTION NO. BOI-LEH-388-20 CERTIFICATE OF TAX EXEMPTION TO WHOM IT MAY CONCERN : This certifies that FEDERAL LAND, INC. , with Tax Identification Number (TIN) 000-000-000-000, is exempt from income tax and creditable withholding tax on its income received directly in connection with its low-cost mass housing project, Cordova Tower Brgy. Sto. Nio, Marikina City , consisting of 522 residential units used solely for family home or dwelling purposes located at Barangay Sto. Nio, Marikina City, a project duly registered with the Board of Investments (BOI) under Registration No. 2008-226 dated August 15, 2008, for a period of 4 years beginning from May 2010 or actual start of commercial operation/selling, whichever is earlier, but in no case earlier than the date of registration of the project with the BOI, pursuant to Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987" and Section 2.57.5 (B) (2) of Revenue Regulations 2-98, as amended. Moreover, the sale by the Company of residential lots valued at P1,919,500.00 and below, or house and lot and other residential dwellings valued at P3,199,200.00 and below, is VAT-exempt under Section 109 (1) (P) of the 1997 Tax Code, as amended. Provided, however, that beginning January 1, 2021, the VAT exemption shall only apply to sale of house and lot and other residential dwellings 1 with selling price of not more than Two Million Pesos (P2,000,000.00). HTcADC The sale, however, of housing units in excess of the 522 residential units registered with the BOI, if any (per HLURB License to Sell No. 22767, the excess is 13 residential units) as well as the 13 commercial units and 174 parking slots, shall be subject to payment of appropriate taxes under the National Internal Revenue Code of 1997, as amended. The grant of tax exemption herein is subject to the compliance with the provisions of applicable BIR rules and regulations and the Terms and Conditions stated at the back hereof. The Company is liable, however, for all other applicable taxes not discussed above. 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 16th day of July, 2020. (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue ATTACHMENT TERMS AND CONDITIONS OF THE CERTIFICATE OF TAX EXEMPTION 1. The exemption from income and creditable withholding taxes covers only income directly attributable to the revenues generated from the project, Cordova Tower Brgy. Sto. Nio, Marikina City , consisting of 522 residential units used solely for family home or dwelling purposes located at Barangay Sto. Nio, Marikina City. Such exemption shall not cover revenues from units with selling price exceeding P2,000,000.00. 2. The Company is obligated to construct and sell 522 residential units based on the following: Condominium Unit Type Product Mix (No. of Units) Floor Area (sq.m. per unit) 1-bedroom 355 22.1-34.5 sq.m. 2-bedroom 167 44.2-45 sq.m. Total 522 15,371.7 sq.m. and shall adhere to the following selling prices as represented: Unit Type 1-bedroom 1-bedroom 1-bedroom 2-bedroom 2-bedroom Unit Size in sq.m. 22.1 22.9 34.5 44.20 45.00 Price/Unit P__________ P__________ P__________ P__________ P__________ Total No. of Units 341 12 2 29 138 3. In the computation of the project's ITH, interest income from in-house financing shall not be considered as part of the revenues generated from the registered housing project. 4. The Company's entitlement to ITH from its BOI-registered housing project is subject to the compliance with the provisions of the Specific Terms and Conditions of its BOI Registration. CAIHTE 5. Pursuant to Section 4 of the Republic Act (RA) No. 10708, 2 the Company is required to file its tax returns and pay their tax liabilities, on or before the deadline as provided under the 1997 Tax Code, as amended, using the electronic system for filing and payment of taxes of the BIR. It shall file with BOI a complete annual tax incentives report of its income-based tax incentives, VAT and duty exemptions, deductions, credits or exclusions from the tax base, as may be provided under E.O. 226, within the periods prescribed under R.A. 10708's Implementing Rules and Regulations and Joint Memorandum Circular No. 1-2016 dated September 1, 2016. 6. The Company shall be constituted as a withholding agent for the government if it acts as employer and any of its employees received compensation income subject to compensation withholding tax, or if it makes payments to individuals or corporations subject to the withholding taxes at source as required under Chapter XIII and Section 57 of the Tax Code of 1997, as amended and implemented by Revenue Regulations No. 2-98, as amended. 7. The Company is required to file on or before the 15th day of the fourth month following the close of its 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 taxable year. aScITE 8. Finally, the Company's books of accounts and other pertinent records shall be subject to periodic examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether it has been complying with the conditions under which it has been granted tax exemption or tax incentives and its tax liability, if any, pursuant to Section 235 of the Tax Code of 1997, as amended. Footnotes 1. Sale of lot only, regardless of the price, shall be subject to VAT starting January 01, 2021 pursuant to Republic Act (RA) No. 10963. 2. An Act Enhancing Transparency in the Management and Accounting of Tax Incentives Administered by Investment Promotion Agencies.