BIR Ruling No. 572-2017

BUREAU OF INTERNAL REVENUE REPUBI' : OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Sec. 5. RA 8367 RMC No. 9-2016 BIR Ruling No. 302-14 RR No. 13-2004 RR No. 9-2000 RR No. 9-2004

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2309 2nd flr MJN Building, Don Chino Roces Ave. Makati City MEAD JOHNSON NUTRITION EMPLOYEES SAVINGS AND LOANS ASSOCIATION, INC.

Gentlemen: Attention: DOMINADOR S. CANEDA President

requesting for Certificate of Withholding Tax Exemption pursuant to Section 30 (B) of the of the Tax Code of 1997, as amended. This refers to your undated letter received by this Office on April !8, 2013.

Securities and Exchange Commission (SEC) under Registration No. association duly organized under the laws of the Philippines; that it is registered with the Association, Inc. (MJNESLA)' (TIN purpose for which the corporation is formed are to instill in the employees the value of forced savings; to have funds available as loans to them whenever they are in dire need of cash; and to engage in other ventures for the furtherance of the benefits of its members insofar as may be permitted by law"; that a Certification was issued by MJNESLA certifying that Bristol-Myers Squibb Employees Savings & Loan Association, Inc. has not availed any of the tax exempt provisions of RA No. 8367; 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 with Certificate of Authority No. It is represented that Mead Johnson Nutrition Employees Savings & Loan ', is a non-stock savings and loans dated August 8. 1966. that "the

I Formerly: Bristol-Myers Squibb Employees Savings & Loan Association, Inc.

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In reply. please be informed that Section 30 (B) of the Tax Code of 1997. as amended. provides. viz:

Shall not he taxed under this Title in respect to income received by them as such. "Sec. 3o. Exempt from Tax on Corporations. - The following organizations

XXX

cooperative hank without capital stock orgunized and operatedt for nmitual porpnses tond (B) Atutual savings hank iot huving at capitut stock represenedt by shares. and

Without profif:

the Regulation of the Organization and Operation of Non-Stock Savings and Loan Associations ". provides. viz.: Moreover. Section 5 of Republic Act No. 8367. entitied: "An Act Providing for

"St(. 5. Tax Exemption. An Association shall he exempt from pay'ment of tar

am' activity conducted for profit, regardless of the disposition thereof. is subject to the Provided, however, That income derived from any of its properties. real or personul. or Code. in respect to income it receives. including interest on its deposits with any bank; Orresponding internal revenue taxes imposed under the National Internal Revenue

of its members from the net income of the .Associations shall be exempt from income tux. " Interest earnings on deposits of members with Association, us well as the shares

associations which are exempt from income pursuant to Section 30 (B) of the Tax Code of 1997. as amended. There being no amendment made on the exemption of non-stock supplement the provision of the Tax Code of 1997, as amended. mutual savings bank under RA 84242. the foregoing RA No. 8367 shall continue to RA 8367 regulates the organization and operation of non-stock savings and loan

Based on the foregoing. MJNESLA shall be exempt from incomc tax with

deposit substitutes which shall be exempt from twenty percent (20%) final withholding respect to income it receives. including interest income derived from its deposit and tax. (BIR Ruling No. 302-14 dated July 24,2014)

capital or ordinary assets. is subject to applicable income tax depending on the classification of its propertics cithcr However, any disposition made by MJNESLA of its properties (reai or personal)

amended. as further clarified in Revenue Memorandum Circular (RMC) No. 9-2016 operations, unless otherwise exempted under special law. implementing Section 122 of the National Internal Revenue Code (NIRC) of 1997. as provides for the imposition of Gross Receipts Tax (GRT) on Non-Bank Financial Intermediaries (NBFIs), thus MJNESLA is subject to GRT on income derived from its Moreover, Section 4 of Revenue Regulations (RR) No. 9-2004, as amended.

2 Tax Code of 1997. as amended

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income tax. T'hus, MJNESLA as NBFI is subject to Documentary Stamp Tax (DST) under the provisions of RR No. 13-2004 implementing Titie VII of the NIRC. as amended, particularly on loan agreements, mortgages, pledges. foreclosures and sales. As provided under Section 5 of RA No. 8367, MJNESLA is only exempt from

among others.

ruling shall be considered null and void. However. if upon investigation, it will be disclosed that the facts are different, then this This ruling is being issued on the basis of the foregoing facts as represented.

Very truly yours.

K-I-JRC Commissioner of Internal Revenue CAESAR R. DULAY 011650