Interest Income of Cooperatives from Times and Savings Deposits Remain Subject to 20% Final Tax

September 10, 1991 BIR RULING NO. 179-91 24 (e) (1) 123-91 179-91 Gentlemen : This refers to your letter dated May 29, 1991, requesting information as to whether your interest income from time and savings deposits with the PNB and DBP is subject to the 20% (not 15%) final tax, being a cooperative duly registered under the provisions of RA 6938 (not 6939) hence exempt from all taxes pursuant to Article 62 thereof. In reply, please be informed that the interest income of cooperatives from Philippine currency bank deposits, yield from deposit substitutes, trust funds and similar arrangements and royalties derived from sources within the Philippines remain subject to the 20% final tax under Section 24 (e) (1) of the Tax Code, as amended, notwithstanding the provisions of Article 61 and 62 of the Cooperative Code. This is so, because the exemption granted to cooperatives by the said Code does not apply to taxes on income not arising from cooperative productive activity, such as interest on bank deposits, among others. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge