BIR Ruling No. 046-15

February 11, 2015 BIR RULING NO. 046-15 RA 8367; BIR Ruling No. 526-12 Savings and Loan Association of Government Auditors, Inc. Commission on Audit Compound Commonwealth Avenue, Quezon City Attention: Atty. Isabel Agito President Gentlemen : This refers to your letter dated July 20, 2012 duly indorsed by Revenue District Office No. 39-South Quezon City requesting for tax exemption pursuant to Republic Act (RA) No. 8367, entitled: "An Act Providing for the Regulation of the Organization and Operation of Non-Stock Savings and Loan Associations". It is represented that SAVINGS AND LOAN ASSOCIATION OF GOVERNMENT AUDITORS, INC. (SLAGA) (TIN: 000-815-937-000) is registered with the Securities and Exchange Commission (SEC) under Registration No. 6216; that it holds its principal office at Commission on audit Compound, Commonwealth Avenue, Quezon City; that a Certificate of Authority No. C-020 was issued by the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas [BSP]) on October 16, 1967 in favor of SLAGA that among the purposes for which the association is formed are as follows: 1. To encourage savings and promote thrift among its members, who are required to make periodic deposits in the association in accordance with its By-Laws: 2. To extend financial assistance to its members in any such legal forms as may be able to give; and 3. To educate members in the wise use of money and to emphasize the importance of punctuality in meeting obligations. and that the BSP (Integrated Supervision Department) issued a Certification dated September 2, 2014 stating that SLAGA is a duly registered non-stock savings and loan association under the supervision of the BSP pursuant to the provisions of the New Central Bank Act and the General Banking Law of 2000. ETISAc In reply, please be informed that Section 5 of RA No. 8367 provides viz.: "Section 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." Based on the facts represented, this Office hold that pursuant to the above provision of the law, SLAGA shall be exempt from payment of tax in respect to income it receives, including interest on its deposit with any bank. However, its 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. (BIR Ruling No. 526-12 dated August 23, 2012) 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 Bureau of Internal Revenue