BIR Ruling No. 526-12

August 23, 2012 BIR RULING NO. 526-12 Section 5 of Republic Act (R.A.) No. 8367; BIR Ruling No. 138-97 dated December 29, 1997 Judiciary Savings and Loan Association, Inc. Court of Appeals Centennial Bldg. Maria Orosa St., Ermita, Manila Attention: Carmencita C. Angelo President Madame : This refers to your letter dated 24 April 2012 requesting exemption from income tax and withholding tax on final interest on bank deposits pursuant to Section 5 of Republic Act No. 8367 otherwise known as the Revised Non-Stock Savings and Loan Association Act of 1997. It is represented that Judiciary Savings and Loan Association, Inc. is a non-stock organization duly registered with the Securities and Exchange Commission under SEC Registration No. 2951, dated 4 December 1991. It has been issued Certificate of Authority No. C-056 from Bangko Sentral ng Pilipinas (BSP) dated 2 June 1971. On 5 May 1998, the Bureau of Internal Revenue (BIR) issued Ruling No. DA-176-98. In reply, please be informed that Section 5 of Republic Act (R.A.) No. 8367 provides that: "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 Associations, as well as the shares of its members from the net income of the Associations shall be exempt from income tax." AaSCTD Based on the foregoing, interest income derived by the Judiciary Savings and Loan Association, Inc. from its deposit and deposit substitutes are exempt from twenty percent (20%) final withholding tax. (BIR Ruling No. 519-11 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 ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue