BIR Ruling [DA-347-98]

July 28, 1998 BIR RULING [DA-347-98] Philippine Navy Savings & Loan Association, Inc. Bonifacio Naval Station Fort Bonifacio, Makati City Attention: Commo . Eduardo T . Domingo (Ret . ) AFP President & General Manager Gentlemen : This refers to your letter dated March 23, 1998 requesting for exemption from the twenty percent (20%) final withholding tax on the interest income from bank deposit of your Association, 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: LLjur "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. "Interest earnings on deposits of members with Associations, as well as the shares of its members from the net income of the Associations shall be exempt from income tax." In reply, please be informed that as a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission under S.E.C. Registration No. AN093-003407 dated August 4, 1993 and with the Central Bank of the Philippines under Certificate of Authority No. NS-093 dated September 17, 1993, the interest income derived by the Philippine Navy Savings and Loan Association, Inc. 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. cdt Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)