BIR Ruling

May 10, 1973 PILMICO Employees Consumer's Cooperative, Inc. Iligan City Attention: Mr . Graciano Noval President Gentlemen : This refers to your telegram dated March 27, 1973 requesting certificate of tax exemption under the provisions of Republic Act No. 2023, as amended by Republic Act No. 4362. aisa dc In reply, I have the honor to inform you that, if you are registered under Republic Act No. 2023, as amended by Republic Act No. 4362, otherwise known as the "Philippine Non-Agricultural Cooperative Act", you are entitled to tax exemption pursuant to Section 66 thereof which provides: "SEC. 66. . . . "(1) Cooperatives with net assets of not more than five hundred thousand pesos shall be exempt from all taxes and government fees of whatever name and nature except those provided for under this Act: Provided , however , That cooperatives having net assets in excess of five hundred thousand pesos shall pay taxes as proved hereunder: (a) Income Tax they shall pay tax at the full rate as provided under existing laws on the amount allocated for interest on capital; (b) Sales Tax they shall pay fixed and percentage taxes at the full rate as provided under existing laws; and (c) They shall pay all other taxes, unless otherwise provided herein at the full rate as provided under existing laws. "(2) They shall be exempt from the payment of documentary stamp tax, residence taxes, tax on banks and insurance companies and municipal or city taxes, Provided , however , That no cooperative organized under this Act shall be exempt from the payment of specific taxes levied by the National Internal Revenue Code on all articles or merchandise manufactured by such cooperative." As regards the enjoyment of income tax exemption by cooperatives under Republic Act No. 2023, as amended by Republic Act No. 4362, it is, however, the position of this Office that the same had already been repealed by the provision of Section 24 (d) of the Tax Code, as amended by Republic Act No. 5431. Accordingly, cooperatives are now subject to the payment of income tax irrespective of the amount of their net assets. Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue