BIR Ruling [DA-356-98]

August 3, 1998 BIR RULING [DA-356-98] Department of Engineering & Public Works Savings and Loan Association, Inc. City Hall, Manila Attention: Mr . Eduardo P . Mencias President Gentlemen : This refers to your letter dated May 18, 1998 requesting in effect 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: cdti "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 savings and loan association registered with the Securities and Exchange Commission (SEC), the interest income derived by Department of Engineering & Public Works Savings and Loan Associations (DEPW-SLAI) 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 fact 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. aisadc Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)