BIR Ruling No. 029-13

January 22, 2013 BIR RULING NO. 029-13 Sec. 5 RA No. 8367; BIR Ruling No. 519-2011 Mariwasa Employees Savings and Loan Association, Inc. REY Compound, C. Raymundo Avenue Brgy. Rosario, Pasig City Attention: Regina Sy Co Seteng President Gentlemen : This refers to your letter dated May 7, 2012 requesting on behalf of Mariwasa Employees Savings and Loan Association, Inc. ("MESLAI") an updated certificate of exemption from the twenty percent (20%) final withholding tax on the interest income derived by MESLAI from its deposits and deposit substitutes pursuant to Republic Act (RA) No. 8367, approved on October 21, 1997 and which took effect on November 14, 1997. HCSAIa It is represented that BIR Ruling No. DA (TSF-002) 029-2008 had been previously issued by this Office in favor of MESLAI exempting it from the twenty percent (20%) final withholding tax on its interest income from bank deposits and deposit substitutes. In reply, please be informed that Section 5 of Republic Act No. 8367, entitled: "An Act Providing for the Regulation of the Organization and Operation of Non-Stock Savings and Loan Associations", 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. "Interest earnings on deposits of members with Association, as well as the shares of its members from the net income of the Associations shall be exempt from income tax." Based on the foregoing, interest income derived by MESLAI from its deposit and deposit substitutes are exempt from twenty percent (20%) final withholding tax. ( BIR Ruling No. 519-2011 dated December 22, 2011 ) 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, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue