BIR Ruling No. 328-13

August 28, 2013 BIR RULING NO. 328-13 Sec. 5, Republic Act No. 8367; BIR Ruling No. 519-2011 Standard Chartered Bank Standard Chartered Bank Bldg. 6788 Ayala Avenue, Makati City Attention: Ms. Brigitte A. Ignacio AVP-Priority Banking Gentlemen : This refers to your letter dated June 20, 2012 requesting on behalf of the Shell Employees Savings and Loan Association, Inc. ("SESLAI") revalidation of its certificate of exemption from the twenty percent (20%) final withholding tax on its interest income derived from any bank deposits pursuant to Republic Act (RA) No. 8367, approved on October 21, 1997 and which took effect on November 14, 1997. Documents submitted show that SESLAI is a non-stock corporation duly organized under the laws of the Philippines, with office address at Shellhouse, 156 Valero St., Salcedo Village, Makati City; that it is registered with the Securities and Exchange Commission (SEC) bearing SEC Certificate of Registration No. 9657; that it is recognized by the government and permitted by the Bangko Sentral ng Pilipinas (BSP) to operate as a Non-Stock Savings and Loan Association per Certification dated September 5, 1975 issued by G.S. Licaros, Governor of the Bangko Sentral ng Pilipinas; and that the exemption of SESLAI from the twenty percent (20%) final withholding tax on its interest income derived from bank deposits had already been confirmed by this Office in BIR Ruling No. DA-141-98 dated April 16, 1998. In reply, please be informed that Section 5 of Republic Act No. 8367, entitled: "An Act Providing for the Regulation of the Organization and Operation of Non-Stock Savings and Loan Associations", provides, viz. : SHCaDA "SEC. 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. "Interest earnings on deposits of members with Association, 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 the SESLAI from its bank deposits is exempt from twenty percent (20%) final withholding tax. (BIR Ruling No. 519-2011 dated December 22, 2011) ITScAE 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