BIR Ruling No. 297-61

July 26, 1961 BIR RULING NO. 297-61 In reply to your letter . . . , I have the honor to inform you as follows: Republic Act No. 821, as amended, creating the Agricultural Credit & Cooperative Financing Administration (ACCFA), authorizes the formation of the Farmer's Cooperative Marketing Association (FACOMA). These associations are subject to internal revenue taxes if they engage in any taxable business there being no provision in Republic Act No. 821, as amended, exempting the same from the payment of taxes. However, FACOMAS organized under Act No. 3425, otherwise known as the Cooperative Marketing Law, as amended by Republic Act No. 702, are exempt from the payment of the merchant's sales tax, the income tax, and all other percentage taxes of whatever nature and description, pursuant to Section 48 thereof. FACOMAS organized under the provisions of Act No. 3425 are subject to tax should they engage in any taxable business not authorized under said Act. The FACOMAS are required to have their books of accounts audited by an Independent Certified Accountant within the meaning of Section 334 of the Tax Code and in relation to Section 8-A of Revenue Regulations No. V-1, when they engage in taxable business. The audit of ACCFA auditors is not sufficient for purposes of Section 334 of the Tax Code. The audit must be made by an independent certified public accountant, as defined in Revenue Regulations No. V-20. FACOMAS operating strictly in accordance with Act No. 3425, not being subject to tax, are not required to file income tax returns; to keep books of accounts; or to register under the provisions of Section 203 of the Tax Code. cdphil