BIR Ruling No. 325-12

May 4, 2012 BIR RULING NO. 325-12 RA 8367; BIR Ruling No. 443-2011 Public Safety Savings & Loan Association, Inc. G/F and 2/F Kiangan Hall Camp Crame, Quezon City Attention: Mr. Robert P. Santos Finance Services Head Gentlemen : This refers to your letter dated April 23, 2010 requesting in effect, for re-validation of a Certification issued to Public Safety Savings and Loan Association (PSSLA), Inc. under BIR Ruling No. DA (TSF-014) 523-2008 dated December 12, 2008, in relation to interest income derived from deposit and deposit substitutes which is exempt from the 20% final withholding tax. TEaADS It is represented that Public Safety Savings and Loan Association (PSSLA), Inc. (TIN 224-173-814-000) is a domestic corporation organized under Philippine laws and is registered with the Securities and Exchange Commission (SEC) under Company Reg. No. CN200309656. It was issued Certificate of Authority by the Monetary Board of the Bangko Sentral ng Pilipinas on June 20, 2003 to operate as a Non-Stock Savings and Loan Association under Republic Act (RA) No. 8367. In reply thereto, please be informed that Section 5 of RA No. 8367 provides that "SEC. 5. Tax Exemption. An Association shall be exempt from payment of tax in respect to income it receives, including interest on its deposit 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. 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." It is undisputed that interest income derived by Public Safety Savings and Loan Association, Inc. from its bank deposits and yield or any other monetary benefit from deposit substitutes is exempt from the 20% final withholding tax imposed under Section 27 (D) (1) of the Tax Code of 1997. Such being the case, this Office reiterates its stance that the interest income derived by Public Safety Savings and Loan Association, Inc. from its bank deposit and yield or any other monetary benefit from deposit substitutes is exempt from the 20% final tax under Section 27 (D) (1) of the 1997 Tax Code, as amended. (BIR Ruling No. 443-2011 dated November 11, 2011) 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. cASEDC Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue