BIR Ruling [DA-010-99]

January 7, 1999 BIR RULING [DA-010-99] Armed Forces & Police Savings And Loan Association, Inc. Col. Bonny S. Serrano Road corner E. Delos Santos Avenue Quezon City Attention: Atty . Samuel B . Padilla Gentlemen : This refers to your letter dated August 4, 1998 stating that BIR Ruling No. DA-180-98 dated May 7, 1998 exempting AFPSLAI from the twenty percent (20%) final withholding tax on interest income from deposit and deposit substitutes with various bank in the light of the provision of Section 5 of R.A. No. 8367 made no mention of exemption from tax of the interest earnings and dividends of the members from their savings and capital contribution deposits with the Association, as you inadvertently failed to include the same in your request. Hence, you are now requesting for a ruling that the interest earnings and the dividends of AFPSLAI members from their savings and capital contribution deposits with the Association be likewise exempt from income tax. In reply, please be informed that under Section 5, paragraph 2 of R.A. No. 8367, the interest earnings on deposit of members including the share of its members from the net income of the Savings and Loan Association are exempt from income tax. Accordingly, the interest earnings of members in their deposits with the AFPSLAI including the share of such members in the net income of AFPSLAI are likewise exempt from income tax as imposed under Section 24(a) and 24(B)(2) of the Tax Code of 1997. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)