BIR Ruling

April 25, 1967 The Philippine Refining Employees Savings and Loan Association, Inc. c/o Philippine Refining Co., Inc. 1351 United Nations Avenue Manila Gentlemen : This refers to your request for exemption from the payment of income tax and from the filing of the corresponding income tax return under section 27(b) of the Tax Code. It appears that the Philippine Refining Employees Savings and Loan Association, Inc. (hereinafter referred to as the Association) is a non-stock corporation duly registered with the Securities and Exchange Commission; that the members of the Association are regular employees of the Philippine Refining Co., Inc.; that the main purpose of the Association is to promote and cultivate the habit of thrift and saving money among its members, and to give financial aid to its members in time of necessity or misfortune, in the form of loans at a nominal rate of interest of 12% per annum; that the sources of income of the Association are mainly from the interest and service charges of regular and special deposits collected and loaned to members; and that after deducting all the necessary operating expenses and interest on special deposits, the net income is declared as dividends by the Board of Directors and distributed to the members on the basis of their total regular deposits at the end of the year. Based on the foregoing facts, the Philippine Refining Employees Savings and Loan Association, Inc. is an exempt organization within the purview of Section 27(b) of the Tax Code, as amplified by Section 26 of Revenue Regulations No. 2. Accordingly, it is exempt from the payment of income tax and from the filing of the corresponding income tax return. It may be stated in this connection, however, that while the Philippine Employees Savings and Loan Association, Inc. is exempt from the filing of income tax returns, nevertheless it is required to file on or before April 15 of each year, an annual information return under oath, stating its gross income and expenses incurred during the preceding year, and a certificate showing that there has not been any substantial change in its By-Laws, Articles of Incorporation, manner of operation and activities as well as sources and disposition of income. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue