BIR Ruling No. 538-12

August 29, 2012 BIR RULING NO. 538-12 Section 5 RA No. 8367; BIR Ruling No. 519-11; BIR Ruling No. 443-11 Bureau of Jail Management and Penology Savings and Loan Association (BJMPSLAI), Inc. G/F BJMP Building, BJMP NHQ Compound 144 Mindanao Avenue, Barangay Bahay Toro Project 8, Quezon City 1116 Attention: Benjamin P. Madrasto, Jr. EVP and General Manager Gentlemen : This refers to your letter dated May 15, 2012 requesting for exemption of BUREAU OF JAIL MANAGEMENT AND PENOLOGY SAVINGS AND LOAN ASSOCIATION (BJMPSLAI), INC. in accordance with Section 5 of Republic Act (RA) No. 8367. It is represented that BUREAU OF JAIL MANAGEMENT AND PENOLOGY SAVINGS AND LOAN ASSOCIATION (BJMPSLAI), INC., with Taxpayer's Identification Number (TIN) 008-217-347, is a non-stock savings and loans association duly organized under the laws of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Registration No. CN201202804 dated February 17, 2012; that " the purpose for which the corporation is formed is to engage in the operations of a non-stock savings and loan association; encourage industry, frugality and accumulation of savings among the members; to extend loans to its members and/or make investments in the securities of productive enterprise or in securities of the government or any of the latter's political subdivisions, instrumentalities or corporations; and generally to exercise and execute all the powers, prerogatives and privileges inherent in and granted to corporations and to such savings and loan association, primarily for the benefit and interest of its members"; and that it is authorized to operate as a Non-Stock Savings and Loan Association under RA No. 8367 by the Bangko Sentral ng Pilipinas on April 24, 2012. In support of its request, BUREAU OF JAIL MANAGEMENT AND PENOLOGY SAVINGS AND LOAN ASSOCIATION (BJMPSLAI), INC. submitted the following documents: 1) Letter request for tax exemption; 2) Certified true copy of BSP Certificate of Authority; 3) Certified machine copy of SEC Certificate of Registration; 4) Certified machine copy of the Articles of Incorporation; 5) Certified machine copy of the By-Laws; 6) Copy of BIR Certificate of Registration. 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. : ITESAc "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 BUREAU OF JAIL MANAGEMENT AND PENOLOGY SAVINGS AND LOAN ASSOCIATION (BJMPSLAI), 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 and BIR Ruling No. 443-11 dated November 11, 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