BIR Ruling No. 302-14

July 24, 2014 BIR RULING NO. 302-14 RA 8367; BIR Ruling No. 328-13 Basa Air Base Savings and Loan Association, Inc. Basa Air Base, Floridablanca, Pampanga Attention: Col. Eduardo S. Dizon (Ret) President Gentlemen : This refers to your letter dated January 14, 2014 requesting an updated certificate of exemption from the twenty percent (20%) final withholding tax on the interest income derived by Basa Air Base Savings and Loan Association, Inc. (BABSLAI) from its deposits and deposit substitutes pursuant to Republic Act (RA) No. 8367, approved on October 21, 1997 and which took effect on November 14, 1997. It is represented that BIR Ruling No. DA-483-99 dated August 24, 1999 had been previously issued by this Office in favor of BABSLAI (TIN: 000-743-830-000) exempting it from the twenty percent (20%) final withholding tax on its interest income from bank deposits and deposit substitutes. In reply, please be informed that Section 5 of RA No. 8367 provides viz. : "SECTION 5. Tax Exemption . An Association shall be exempt from payment of tax in respect to income it receives, including interest on its deposits with any bank; Provided, however, That income derived from any of its properties, real or personal, or any activity conducted for profit, regardless of the disposition thereof, is subject to the corresponding internal revenue taxes imposed under the National Internal Revenue Code. ScCEIA Interest earnings on deposits of members with Associations, as well as the shares of its members from the net income of the Associations shall be exempt from income tax." Based on the foregoing, interest income derived by BABSLAI from its deposit and deposit substitutes are exempt from twenty percent (20%) final withholding tax. (BIR Ruling No. 328-13 dated August 28, 2013) However, income derived from any of its properties or any activity conducted for profit shall be subject to appropriate taxes. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue