BIR Ruling No. 525-12

August 23, 2012 BIR RULING NO. 525-12 Sec. 5 RA No. 8367; BIR Ruling No. 519-2011 BIR Savings and Loan Association, Inc. 1st Floor DPC Building BIR National Office Compound Diliman, Quezon City Attention: Nora E. Tamayo President Gentlemen : This refers to your letter dated July 13, 2012 requesting on behalf of the BIR Savings and Loan Association, Inc. ("BIRSALA") for revalidation of its certificate of exemption from the twenty percent (20%) final withholding tax on its interest income derived from deposits and deposit substitutes pursuant to Republic Act (RA) No. 8367, approved on October 21, 1997 and which took effect on November 14, 1997. Documents submitted show that BIRSALA is a non-stock corporation duly organized under the laws of the Philippines, with office address at 1st Floor DPC Building, BIR National Office Compound, Diliman, Quezon City; that it is registered with the Securities and Exchange Commission (SEC) bearing SEC Certificate of Registration No. 37665; and that it is recognized by the government and permitted by the Bangko Sentral ng Pilipinas (BSP), in accordance with Certificate of Authority No. C-041 dated June 13, 1969, to operate as a Non-Stock Savings and Loan Association. 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." aAHDIc Based on the foregoing, interest income derived by the BIRSALA from its deposit and deposit substitutes are exempt from twenty percent (20%) final withholding tax. ( BIR Ruling No. 519-2011 dated December 22, 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. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue