Immaculate Conception Parish Development Cooperative

March 7, 2008 BIR RULING [ECCP-039-08] R.A. 6938; ECCP-02-2002 Immaculate Conception Parish Development Cooperative 37-A Lantana corner St. Francis Street Cubao, Quezon City Attention: Mr. Orlando C. Villarin ICPDC Chairman Gentlemen : This refers to your letter requesting for a tax exemption under the provisions of R.A. No. 6938, otherwise known as the Cooperative Code of the Philippines. HcaATE It appears that IMMACULATE CONCEPTION PARISH DEVELOPMENT COOPERATIVE is a multipurpose cooperative with Certificate of Registration No. 22-1027 dated March 25, 2001 from the Cooperative Development Authority (CDA); that the objectives and purposes for which it is formed are those stated in the Articles of Cooperation; and that it has submitted to this Office in support of its request and in compliance with Section 8 of Revenue Memorandum Circular No. 48-91 dated June 18, 1991 the following documents, viz. : (1) Certificate of Registration from the CDA; (2) Articles of Cooperation and By-laws; (3) Certification under oath of the list of members and the share capital contribution of each members; (4) Certificate of Good Standing from the CDA; and (4) Latest Audited Financial Statements. Based on the foregoing, IMMACULATE CONCEPTION PARISH DEVELOPMENT COOPERATIVE is exempt from income tax on income from its operation pursuant to Article 61 of R.A. No. 6938. Moreover, IMMACULATE CONCEPTION PARISH DEVELOPMENT COOPERATIVE is exempt from the value-added tax (VAT) on its gross receipts from lending activities under Section 109 (M) of the Tax Code of 1997, as amended by R.A. No. 9337, as implemented by Revenue Regulations No. 16-2005, as amended. IMMACULATE CONCEPTION PARISH DEVELOPMENT COOPERATIVE is also exempt from the payment of the 3% percentage tax and the annual registration fee of P500, respectively imposed under Sections 116 and 236 (B) of the same Code, but it is not exempt from registration. Furthermore, IMMACULATE CONCEPTION PARISH DEVELOPMENT COOPERATIVE interest income from currency bank deposits, yield from deposit substitutes, trust funds and similar arrangements and royalties derived from sources within the Philippines and interest income it will derive from a depositary bank under the expanded foreign currency deposit system shall be subject to the 20% and 7.5% final tax, respectively, imposed under Section 27 (D) (1) of the Tax Code of 1997. It shall also be taxed on capital gains realized on sales or exchanges of property. STCDaI It is emphasized, however, that the exemption of the cooperative does not extend to the individual members thereof. Moreover, the cooperative shall be constituted as a withholding agent if it acts as an employer and its employees receive compensation income subject to withholding tax provided for in Section 57 of the Tax Code of 1997. Furthermore, said members shall also be taxed on prizes, winnings and capital gains realized on sales or exchanges of properties. Finally, IMMACULATE CONCEPTION PARISH DEVELOPMENT COOPERATIVE is required to file on or before the 15th day of the fourth month following the close of its accounting period, a Profit and Loss Statement and Balance Sheet with the Annual Information Return under oath, stating its gross income and expenses incurred during the year and a certificate showing that there has not been any change in the By-Laws, Articles of Cooperation, manner of activities as well as sources and disposition of income. A copy of this letter of exemption must be attached to the Annual Information Return which it will file on or before said date. It is of course understood that the cooperative's books of accounts and other pertinent records shall be subject to periodic examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether it has been complying with the conditions under which it has been granted tax exemption or tax incentives and its tax liability, if any, pursuant to Section 235 of the Tax Code of 1997. (BIR Ruling No. ECCP-17-2001 dated July 30, 2001) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service