Clarification of Tax Exemption Granted to Cooperatives

December 22, 1987 BIR RULING NO. 410-87 24 204-87 410-87 Gentlemen : This refers to your letter dated September 17, 1987 requesting exemption from the payment of income tax as well as from the 20% withholding tax on your interest income from bank deposits. In reply, please be informed that the tax exemption of cooperatives duly registered under P.D. No. 175 which has been restored by P.D. No. 2008 on January 8, 1986 and effective until December 31, 1991, has been withdrawn by Executive Order No. 93. Such being the case and since Executive Order No. 93 took effect on March 10, 1987 (BIR Ruling No. 182-87), you are subject to income tax and consequently to the 20% final tax on interest and/or yield on deposit substitute instruments; and interest income from Philippine currency bank deposits paid or accrued beginning March 10, 1987. iatdc BIR Ruling Nos. 143-86 and 148-86 dated August 5 and 12, 1986, respectively, which ruled in favor of the exemption cannot be cited to support your request because said rulings were issued after P.D. No. 2008 restoring the exemption and before withdrawal of said exemption by Executive Order No. 93. Very truly yours, (SGD.) EUFRACIO D. SANTOS (Officer-in-Charge)