Request for Exemption from Final Withholding Tax on Interest and/or Yield from Deposit Substitute Instruments and on Interest Income

August 5, 1986 BIR RULING NO. 143-86 24 (d) 021-86 143-86 Gentlemen : This refers to your letter dated May 7, 1986 requesting exemption from the 17 1/2% final withholding tax on interest and/or yield from deposit substitute instruments as well as on interest income from your Philippine currency bank deposits whether savings or time deposits. It is represented that the Kilusang Bayan Sa Paglilingkod ng mga Magtitinda ng Bagong Pamilihang Bayan ng Muntinlupa, Inc. (KBMBPM, Inc.), is a corporation duly registered with the Bureau of Cooperatives Development under P.D. No. 175 as a full fledged cooperative in good standing with Certificate of Registration No. RIV-FF-029 dated September 12, 1978. In reply, please be informed that P.D. No. 2008 which took effect on January 8, 1986, restored the exemption of cooperatives from income and sales taxes that was previously abolished by P.D. No. 1955 which took effect on October 15, 1984. The said Tax exemption of cooperatives shall be effective only until December 31, 1991. (Revenue Memorandum Circular No. 10-86 dated May 12, 1986). Accordingly, since the exemption of cooperatives from income tax, among others, is restored by P.D. No. 2008 which is a law promulgated later than P.D. No. 1959 (effective October 15, 1984), you are exempt from the 17 1/2% final tax on interest income from Philippine currency bank deposits and yield from deposit substitutes from January 8, 1986 until December 31, 1991. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner