BIR Ruling [DA-257-98]

June 19, 1998 BIR RULING [DA-257-98] JEMBA Savings and Loan Association, Inc. Bo. Ibayo, Edison Road Paraaque, Metro Manila Attention: Mr . Danilo A . Macatangay President Gentlemen : This refers to your letter dated April 7, 1998 requesting for exemption from the twenty percent (20%) final withholding tax on your interest income from deposit and deposit substitutes with a bank, pursuant to the provisions of Section 5 of Republic Act No. 8367 otherwise known as the "Revised Non-Stock Savings and Loan Association Act of 1997" which provides, viz: "SEC. 5. Tax Exemption . An Association shall be exempt from payment of tax in respect to income it receives, including interest on its deposits with any bank: Provided, however, That income derived from any of its properties, real or personal, or any activity conducted for profit, regardless of the disposition thereof, is subject to the corresponding internal revenue taxes imposed under the National Internal Revenue Code. LexLib "Interest earnings on deposits or members with Associations, as well as the shares of its members from the net income of the Associations shall be exempt from income tax." It is represented that JEMBA is a domestic non-stock Savings & Loan Association organized under the laws of the Philippines with SEC Registration No. 70359 and likewise registered with the BIR under Registration No. 94-520-003523; and that the members of that Association are all employees of Johnson & Johnson Phils., also a domestic corporation with principal office at Edison Avenue, Paraaque, Metro Manila. In reply, please be informed that as a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission (SEC), the interest income derived by JEMBA Savings & Loan Association from its bank deposit and yield or any other monetary benefit from deposit substitutes shall be exempt from the 20% final withholding tax imposed under Section 27 (D)(1) of the Tax Code of 1997. (BIR Ruling No. 138-97 dated December 29, 1997) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different from those as represented, then this ruling shall be considered null and void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)