BIR Ruling No. 156-15

May 6, 2015 BIR RULING NO. 156-15 RA 9520; 000-00 San Juan Municipal Cooperative Development Council San Juan, Siquijor Attention: Warlito Y. Suan MCDC Chairman/Presiding Officer Gentlemen : This refers to your Resolution No. 02-2014 entitled "A Resolution officially requesting Hon. Kim Henares, BIR Commissioner, Quezon City to differ [defer] the implementation of Revenue Regulation Imposing Taxation of Thirty Percernt [Percent] (30%) on the net income of the cooperatives who have no certificate of tax exemption acquired from the BIR and citing reasons therefor". Please be informed that Section 13 of Joint Rules and Regulations implementing Articles 60, 61 and 144 of the Republic Act 9520, otherwise known as the Philippine Cooperative Code of 2008 in relation to RA No. 8424 or the National Internal Revenue Code, as amended, provides that: Section 13. Documents to be Attached to the Letter . APPLICATION FOR THE ISSUANCE OF A CERTIFICATE OF TAX EXEMPTION/RULING. xxx xxx xxx The application for exemption by a qualified cooperative is a pre-requisite for availment of tax exemption by said cooperative. The Certificate of Tax Exemption/Ruling shall be issued only after determination by the BIR that the cooperative has complied with all the necessary documentary requirements for entitlement under RA 9520. xxx xxx xxx All duly registered cooperatives under RA 9520 shall apply for a Certificate of Tax Exemption/Ruling within sixty (60) days counted from the date of issuance of certificate of registration. Exemption from taxes herein stated shall apply to the duly-registered cooperatives on the year the certificate of tax exemption/ruling was issued. However, for the initial issuance of the Certificate of Tax Exemption/Ruling under RA 9520, the effectivity of such Certificate of Tax Exemption/Ruling issued shall commence from the year RA 9520 took effect: Provided, That the cooperative has registered with the CDA as provided for under Article 144 of RA 9520. CAIHTE For applications for tax exemption not filed within the prescribed period, the late applicants shall be subjected to internal revenue taxes prior to the issuance of the Certificate of Tax Exemption/Ruling ; however they can apply for tax credit/refund of taxes previously paid from the date of registration with the CDA up to the issuance of the Certificate of Tax Exemption/Ruling, subject to the rules and procedures for processing tax credit/refund. The BIR shall act on the request for tax refund of taxes previously paid within one hundred twenty (120) days from submission of the complete documents in support of the application filed. (emphasis supplied) Accordingly, the foregoing provision clearly provides that cooperatives without Certificate of Tax Exemption are subject to internal revenue taxes, however, cooperatives may apply for tax credit/refund of taxes previously paid from the date of registration with the CDA up to the issuance of the Certificate of Tax Exemption/Ruling, subject to the rules and procedures for processing tax credit/refund. Thus, there being no provision allowing the deferment of revenue regulations, the herein request is denied for lack of legal basis. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue