Whether the Interest Income of the Agricultural Credit Policy Council (ACPC) of the Department of Agriculture is Subject to Income Tax

April 13, 1994 BIR RULING NO. 094-94 24 000-00 094-94 Development Bank of the Philippines Head Office, Makati, Metro Manila Attention: Mr . Jose A . Salvatierra Vice President Gentlemen : This refers to your letter dated February 14, 1994 requesting for a ruling as to whether the interest income of the Agricultural Credit Policy Council (ACPC) of the Department of Agriculture is subject to income tax. It is represented that the Development Bank of the Philippines (DBP) acquired a P150 million loan from ACPC to finance various aquaculture projects; and that the loan carries an interest rate of 8% and 9% per annum . In reply thereto, please be informed that the interest income of ACPC derived from its loan of P150 million to the DBP is subject to income tax pursuant to Section 24(a) of the Tax Code, as amended although it is not subject to the expanded withholding tax under Revenue Regulations No. 6-85 as amended otherwise known as the Revised and Consolidated Expanded Withholding Tax Regulations. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue