BIR Ruling No. 097-82

March 30, 1982 BIR RULING NO. 097-82 24 (cc) 000-00 097-82 Land Bank of the Philippines 6th Floor, BF Condominium Bldg. Intramuros, Manila Attention: A . B . F . Gaviola, Jr . Acting Trust Officer Gentlemen : This refers to your letter dated January 6, 1981, requesting that interest income or yield on deposit substitutes of the Agricultural Guarantee Fund, be exempt from the withholding tax provision of Section 24(cc) of the Tax Code, as amended by Presidential Decree No. 1739. It was disclosed that the Agricultural Guarantee Fund was transferred to the Philippine Crop Insurance Corporation as part of the capital contribution of the Government to the Corporation. (Section 7, P.D. No. 1467). The Philippine Crop Insurance Corporation as a tax exempt government owned corporation pursuant to Presidential Decree No. 1467, dated June 11, 1978, is not covered by Presidential Decree No. 1177, which requires government owned or controlled corporations to pay income taxes effective July 30, 1977, for it is a later law. Accordingly, the interest income on bank deposits and yield on deposit substitutes accruing to Philippine Crop Insurance Corporation shall be exempt from final withholding tax prescribed under Section 24(cc) of the Tax Code, as amended. Likewise, the interest income derived by Agricultural Guarantee Fund and yield on deposit substitutes shall be exempt from final withholding tax, since the Agricultural Guarantee Fund is now owned by Philippine Crop Insurance Corporation. This serves as authority of the depository banks to forego withholding of final tax on interest earnings of bank deposits maintained by Philippine Crop Insurance Corporation and Agricultural Guarantee Fund with them. Very truly yours, RUBEN B. ANCHETA Acting Commissioner