BIR Ruling

February 12, 1969 The President Caltex Manila Cooperative Credit Union, Inc. 540 Padre Faura Manila S i r : This refers to your letter dated January 30, 1969 requesting opinion as to whether or not the Caltex Manila Cooperative Credit Union, Inc. (hereinafter referred to as the Cooperative) is exempt from the additional four centavos (P0.04) documentary stamp tax or the science tax as required under R. A. No. 5448 on checks issued to said Cooperative by Merchants Banking Corporation. It appears that under Section 66, par. 2, of R. A. No. 2023 otherwise known as the "Philippine Non-Agricultural Act", the Cooperative is exempt from the payment of documentary stamp tax, residence tax, tax on banks and insurance companies and municipal and city taxes. In reply, I have the honor to inform you that under the aforesaid provision the Cooperative is exempt only from the taxes for which it is directly liable. The regular documentary and science stamp taxes on checks are the direct tax liabilities of the bank which issue them. The fact that the aforesaid taxes were charged to the Cooperative by the bank does not make it the one liable to the same. Hence, the Cooperative is not covered by the exemption. In such cases, however, the taxes shall form part of the taxable gross receipts of the bank. cdta Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue