BIR Ruling No. 413-61

October 31, 1961 BIR RULING NO. 413-61 Litton & Co., Inc. P. O. Box 767 610 Juan Luna, Manila Gentlemen : Reference is made to your letter dated October 31, 1961, requesting the following information: "The employees of Litton Enterprises are contemplating to form a savings and loan association. However, before the association is finally organized, we have the honor to request for an advice whether or not, under the conditions hereinbelow enumerated, the proposed savings and loan association qualifies for the exemption provided in Section 27 of the National Internal Revenue Code. Advice is further requested whether or not it is subject to other internal revenue taxes, such as the privilege tax and the corporate residence tax. "The main features of our proposed association are as follows: 1. The association shall be a non-stock savings and loan association; 2. Membership shall consist of and be limited to bonafide employees of Litton & Co., Inc. and its affiliates who are assigned at Juan Luna Office; 3. The association shall be managed exclusively by its members; 4. The association shall receive regular semi-monthly deposits from its members only; 5. Loan shall be granted to its members only in accordance with their capacity to repay. Such loan shall bear interest at the rate/one per cent (1%) per month on the unpaid diminishing balance; and 6. Net earnings of the association shall be distributed wholly among the members at the end of each fiscal period." In reply thereto, I have the honor to inform you that the savings and loan association that you intend to organize for the mutual benefit of the members thereof is exempt from income tax under the provisions of Section 27(b) of the National Internal Revenue Code. Inasmuch as it will not be engaged in business for profit, it will also be exempt from payment of all internal revenue taxes, such as the privilege tax and the residence tax on corporations. cdtech Very truly yours, (SGD.) MISAEL P. VERA Deputy Commissioner of Internal Revenue The above rulings was duly signed by the Deputy Commissioner of Internal Revenue on October 31, 1961. (SGD.) P. F. LANDAS Revenue Operations Head (Legal)