BIR Ruling No. 519-11

December 22, 2011 BIR RULING NO. 519-11 Sec. 5 RA No. 8367; BIR Ruling No. 138-97 NPC Savings and Loan Association National Power Corporation Quezon Avenue cor. BIR Road, Diliman, Quezon City Attention: Mr. Rolando T. Bacani President Gentlemen : This refers to your letter dated May 12, 2011 requesting on behalf of the NPC Savings and Loan Association for an updated certificate of exemption from the twenty percent (20%) final withholding tax on the interest income derived by the Association 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. 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. : "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 NPC Savings and Loan Association, from its deposit and deposit substitutes are exempt from twenty percent (20%) final withholding tax. ( BIR Ruling No. 138-97 dated December 29, 1997) DTIaHE 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