New Rates for Police Clearance Fees Repealing for Purpose Section 6C.01, Article C, Chapter VI of The Revised Revenue Code of the Municipality of Isulan

July 30, 2008 BIR RULING [DA-(TSF-003) 082-08] R.A. 8367; DA-560-07 Shell Refinery Employees Savings and Loan Association Tabangao, Batangas City Attention: Mr. Numer E. Salamanca President Gentlemen : This refers to your letter dated May 25, 2006 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 appears that Shell Refinery Employees Savings and Loan Association, Inc. ("SRESLAI") is a non-VAT, non-stock, non-profit organization duly registered with the Securities and Exchange Commission under SEC Registration No. 21428, dated September, 1962 located at Tabangao, Batangas City; and that in support of your request, you submitted your Articles of Incorporation and latest financial statements. 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." cSCADE From the foregoing, this Office holds that pursuant to the above provision of law, the interest income derived by SRESLAI from its bank deposit and yield or any other monetary benefit from deposit substitutes shall be exempt from the 20% final withholding tax imposed under Section 27 (D) (1) of the Tax Code of 1997, as amended by R.A. 9337. (BIR Ruling No. 138-97 dated December 29, 1997) 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service