Class C Private Development Bank Exempt from Income Tax as Long as Net Assets Do Not Exceed Maximum Limit Set by Law

June 8, 1981 BIR RULING NO. 090-81 24-cc 000-00 090-81 Development Bank of Dumaguete City, Inc. Dumaguete City Attention: Mr . Jose Romero Vice-President Gentlemen : In reply to your letter dated January 23, 1981, I have the honor to inform you that since your Development Bank has been certified by the Development Bank of the Philippines as a Class C private development bank on the basis of net asset owned as of December 31, 1980, it is exempt from income tax pursuant to Section 10 of Presidential Decree No. 4093, as amended. Accordingly, the interest income on the bank deposits of your Bank is exempt from the 15% withholding tax in the case of savings deposits and 20% in the case of time deposit and yield from deposit substitutes prescribed by Section 24(cc) of the Tax Code, as amended by Presidential Decree No. 1739. It may be stated in this connection that your Bank can enjoy the abovesaid exemption only as long as its net assets do not exceed the maximum limit set by law for which the exemption is allowed. This serves as authority of the depository banks to forego withholding of the final tax on the interest earnings of the deposits maintained by that Bank with them. cdta Very truly yours, RUBEN B. ANCHETA Acting Commissioner