Interest Income on Bank Deposits of the National Coal Authority Shall be Exempt from Withholding Tax

November 16, 1981 BIR RULING NO. 231-81 053-c 67-81 231-81 National Coal Authority PNPC Complex, Merritt Road Fort Bonifacio, Metro Manila Attention: Mr . Manuel D . Yngson, Jr . Acting Legal Counsel Gentlemen : This refers to your letter dated September 11, 1981, requesting exemption from the withholding tax provision of Section 53(3) of the Tax Code, as amended by P.D. No. 1739. cdtech In reply, please be informed that since the National Coal Authority is exempt from the payment of all taxes, duties, fees, imposts and all other charges imposed directly or indirectly by the Republic of the Philippines, its provinces, cities, municipalities and other government agencies and instrumentalities, pursuant to Section 8 of Presidential Decree No. 1772, its interest income on bank deposits shall be exempt from the 15% withholding tax in case of savings deposit and 20% in case of time deposit and yield from deposit substitutes prescribed by Section 24(cc) in relation to Section 53(e) of the Tax Code as amended by P.D. Nos. 1156 and 1739. The National Coal Authority is deemed not covered by P.D. No. 1177 which requires government-owned or controlled corporation to pay income taxes effective July 30, 1977, since P.D. No. 1722 which was enacted on September 16, 1980 is a later law. cd This serves as authority of the depository banks to forego withholding of the tax on the interest earnings of the deposits maintained by National Coal Authority with them. Very truly yours, RUBEN B. ANCHETA Acting Commissioner