BIR Ruling No. 439-2020

L REPUBLICOFTHE PHILIPPINES

DEPARTMENT OP FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

Section 5.RA No.8367 RMC No.9-2016

BIR Ruling No.046-15

BIR Ruling No.460-14

BIR Ruling No.233-14

T-0533-2070

AUG 1 7 2021 MERALCO EMPLOYEES SAVINGS

SLOANASSOCIATIONINC Orerations Building Meralco Cente

Origa AvenusPasig City

AUenIcnLEONORB.ACUAR

EVP'CEC

Cenlener

This refers te your leter caied July 09 2019, requesting on behalf or MRAICO EMPLOIEES SAVTNGS LOAN ASSOCIATION,INC. O

ieo orhs tax cxemption pursuanr to Repubiic AcrRA No.8367ene

An Act Provding for the Regulatinns of the Organization and Operation of Nou-

stockavigs and Loan Assoc.alon

K is reTesenIed hat MERALCO EMPLOYEES SAVINCS & LOAN

AATIoNINCwn Taxpaver's Ienification No.(TIN

corscrion duly organized wder the Jws of the Philippinesthat it is regis ered with the Securities and Fxchange Comnission (SEC) under Compary Regisration n 9.and that it has been issuea wih Ceruficate of Authority No C-051

oouate as a non-siock savings and lan asociation by the Central Bank of -he

Philppn(nowBangke sentn ng Pilipinas

In repiy please e informed as flows

LunT

$ectcn of RA No 8367provides that

SECTiON5.Ix Eemoaor- AnAsociation shall be

exempt roa paynentcftx respec io ir.ome ureceives,including

erest on is deposits n ay b Proviecd however,Thar income

Serived from ay of is properties realsr personal, or any aciivin

conducted for profit.regaraless aine disposiion thereof is subject io

che corresponding mternlrerue iaxes imposed under ihe National

Interni Reverae Cod

MERALCO EMPLOYEES SAVINGS&LOAN ASSOCIATION,INC

Page 2 of 3

Interest earnings on deposits of menibers with Associations, 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.MERALCO EMPLOYEES SAVINGS & LOAN

ASsOCIATION,INC.shall be exempt from income tax with respect to income it

receives. Also, interest income derived by it from its deposit and deposit substiutes is

exempt from twenty percent (20%) final withholding tax. (BIR Ruling No. 046-15

dated February 11,2015and BIR Ruing No.460-14 dated November 13,2014

However,any income derived by MERALCO EMPLOYEESSAVINGS &

LOAN ASSOCIATIONINC.from any of its properties,real or personal, or any

activity conducted for profit, regardless of the disposition thereof, is subject to the

applicable income tax and other iriternal revenue taxes imposed under National

Internal Revenue Code of 1997, as amended. It is subject to the applicable income tax

dependington the classification of itstproperties as capital or ordinary asset.

Gross Receipts Tax

Section 4 of Revenue Regulations (RR No. 9-2004 as amended,

implementing Section 122 of the National Internal Revenue Code of 1997, as

amended. provides for the imposition of Gross Receipts Tax (GRT) on Non-bank

Financial Intermediaries. Section 4 of RR No.9-2004 states that:

SECTION 4. Imposition of Gross Receipts Tax on Other Non-

bank Financial Iniermediaries. - Cross receipts of other non-bank

financial intermediaries non-bank financial intermediarynot

performing quasi-banking fungtions) doing business in the Philippines

shall be subject to GRT at rates and on .items of income provided

hereunder:

a From interest, conmissions, discounts and all

other items treuted as gross intome under the :

Code -- 5%

b On interests. commissions and discounts. from

lending activities as well as.income from financial

leasing, on the basis of remaining maturities of

the instruments from which such receipts"are

derived:

Maturity period is five(5)years or less--5%

Maturity period is inore than five (S) years 1%

XXXXXXXXX

ThuS,MERALCO EMPLOYEES SAVINGS & LOAN ASSOCIATION

INC. is generally subject to GRT on inccme derived from its operations, unless

otherwise exempted under special rules.