RMC No. 90-2026 — Clarification on the Certificate of Compliance issued by the Cooperatives and Social Enterprise Authority of the Bangsamoro Autonomous Region in Muslim Mindanao

{1 I:n \ //2 REPI,tsLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Gto BUREAU OF INTERNAL Rf,VENUE /'i lt BAGONC Bringing In Revenues National Office Building P'L,PINAS for Nation-Building Quezon City AUG I I 2026 REVENUEMEMoRANDUMCTRCULARNo. 0I 0-2026 SUBJECT : Clarification on the Certificate of Compliance issued by the Cooperatives and Social Enterprise Authority of the Bangsamoro Autonomous Region in Muslim Mindanao TO All lnternal Revenue Officials, Employees, and Others Concerned This Circular is issued to clarify and provide guidance on whether lhe "Certificote of Complionce" issued by the Cooperatives and Social Enierp'rise Authority (CSEA) of the Bangsamoro Autonomous Region in Muslim" Mindanao (BARMIVI) can be accepted for the . issuance of Certificate of Tax Exemption (CTE) in lieu of the "Certificote of Good Standing" issued by the Cooperative Development Authority (CDA) as required under Revenue Memorandum Order (RMO) No. 76-20101, which prescribes the policies and guidelines in the issuance of CTE of cooperatives. Purpose of Certificate of Compliance The "Certificote of Good Stonding" issued by the CDA is among the documents required to be attached to the letter-application for the issuance of a CTE in accordance with Section 13 of the Joint Rules.2 The same Section further states that no application for tax exemption shall be issued in the absence thereof. fhe "Certit'icote of Good Standing" issued by the CDA serves as proof that the cooperative has complied with the mandatory requirements under Republic Act (RA) No. 9520, or the Philippine Cooperative Code of 2008, and relevant issuances, and is thus eligible to avail the incentives and privileges under the Joint Rules, in relation to Articles 60 and 61 of the said law-3 The CDA now issues a "Certit'icote ot' Complionce", instead of a "Certificote of Good Stonding", for specific purposes including the availment of the incentives and privileges set forth under the Joint Rules, in relation to Articles 60 and 61 of RA No. 9520.4 1 Dated September 27, 2010. , ioint Rules and Regulatlons implementing Articles 60, 61 and 144 of Republic Act No. 9520, Otherwise Known as the "Philippine Cooperative Code of 2008" in Relation to RA No. 8424 or the National lnternal Revenue Code, as Amended, dated February 5, 2010. 3 Section 4 of CDA Memorandum Circular No. 2011 16, dated May 6, 2011. a Sections 5 (3) and 6 (2) of CDA Memorandum Circular No. 2015-08, dated September 29, 2015 ByA9fx8l.filofuif,fx ETIUE tsioN s_, BIR National Office Bldg., Senator l\4iriam Defensor-Santiago Avenue, Diliman, Website: www.bir.gov.ph ?Uo r r zozo Trunkline: 898'l -7000 i 8929-7676 BY t AtrM \1 UNtr - I T[,tt J:yytrl

creation of the csEA Section 2 (k) of Article V of RA No. 11054, otherwise known as the "Orgonic Low for the Bongsomoro Autonomous Region in Muslim Mindonoo", empowered the Bangsamoro Government (BG) to exercise authority over cooperatives and social entrepreneu rsh ip. Pursuant thereto, the BG enacted Bangsamoro Autonomy Act No. 13 or lhe "Bongsomoro Ad m i n i st rot iv e Cod e " (BAC). Under Section 57 of ltenr il, Chapter 3 (Attached Agencies and Offices) ofthe BAC, the CSEA was created to act as the primary entity to promote the viability and growth of Bangsamoro cooperatives and social enterprises in the Bangsamoro region. The same Section Iikewise states that the CSEA shall be the sole ogency of the BG that registers cooperatives and social enterprises. Further, under Section 53 of the ltem H, Chapter 3 of the BAC, the Cooperative Development Division of the CSEA is mandated to "process opplications for ond thereofter issue Certit'icotes of Registrotion, ond Certificote of Complionce, when worronted". Based on the foregoing, the CSEA serves as the agency that administers and supervises the affairs of cooperatives in the BARMM, including registration and issuance of "Certificote of Complionce". Eventually, the CSEA was recognized by the CDA as their counterpart agency for the registration, regulation, and development of BARMM cooperatives. Applicabilitv of RMO No. 75-2010 on CSEA-resistered Coooeratives It has been argued that the cooperatives in the BARMM were initially registered with the CDA but are now under the CSEA. Hence, the "Certificote ol Compliance" from CSEA should be accepted as sufficient compliance for the issuance of a CTE. However, it is a basic legal principle that grant of tax exemption is never presumed. Any reduction or diminution thereof with respect to its mode or its rate, must be strictly construed, and the same must be coached in clear and unmistakable terms in order that it may be applied.s The provisions of RA No. 9520 cannot be automatically applied to CsEA-registered cooperatives. Under the BAC or any existing BARMM legislation, there are no provisions on the following which serve as counterparts of RA No. 9520: gURE RECC) fl\{ ?,r.,},I5,S fl}.,*rr[,[$3r5 a. Juridical personality under Article 16; b. General requirements for registration under Artic les 10, 11, L4, and 75; AUG 11 2026 c. Registration procedures under Articles 76 and 17; d. Tax exemption under Articles 60 and 6L; and g\ -1 A} ril lN r-)l,i !TtiMt e. Other privileges under Article 62. BY: .ATfu 0 0 fqlo526 Assuming that the BG enacts a Cooperative Code wh ich provides for the gr an to exemptions similar to those under RA No. 9520, the said grant will fall within the express limitations on the BG's taxing power, as provided under Section 9 (a) and (k) of Article Xll of RA No. 11054, which states that the taxing power of the BG shall not extend to lncome tax (except when levied on banks and other financial institutions) and taxes, fees, or charges on countryside and barangay business enterprises and cooperatives duly registered under RA No. 6810, otherwise known as the "Magna Carta for Countryside and Barangay Business 5 Floro Cement Corporation vs. Hon. Benjamin K. Gorospe, Judge, CFI of Misamis Oriental, Branch l, and the Municipality of Lugait, G.R. No. L-46187, August 72, 199!.

Enterprises," and RA No. 6938, otherwise known as the "Cooperative Code ofthe Philippines," as amended. Furthermore, RA Nos. 69396, 95207, and 113648 all provide that the CDA has sole supervision and jurisdiction over all types and categories of cooperatives in the country. ln conclusion, only the "Certificote of Good Stonding" (now "Certificote of Compliance") dulv issued bv tle CDA will be recognized for purposes of availing the tax incentives by cooperatives under RA No. 9520. ln the absence of an appropriate legislation expressly including the CSEA-registered cooperatives located in the BARMIVI within the coverage of the tax exernptions under RA No. 9520, said cooperatives cannot avail of the same tax incentives by submitting a "Certificote of Complionce" issued by CSEA. All internal revenue officials and employees are hereby enjoined to give this Circular as wide a publicity as possible. ,-fl fl CHARTITO MARTIN R. ME Commissioner of lnternol Revenue K-I.EACR1I 00000526 f; u&,lfl,1?,i^'S"rrfl )l,f ,r#,vH#,$ AUG 11 2020 ffi ADMIN iJi{i BY: l,;!, -tMl 6 An Act Creating the Cooperative Development Authority to Promote the Viability and Growth of Cooperatives as lnstruments of Equity, Social Justice and Economic Development, Defining its Powers, Functions and Responsibilities, Rationalizing Government Policies and Agencies with Cooperatave Functions, Supporting Cooperative Development, Transferring the Registration and Regulation Functions of Existing Government Agencies on Cooperatives as Such and Consolidating the Same with the Authority, Appropriating Fu nds Therefor, and for Other Purposes, approved on March 10, 1990. 7 Amends RA No. 6938; This law is otherwise known as the "Philippine Cooperative Code of 2008". 3 Cooperative Development Authority Charter of 2019, approved on Allgust 8, 2019.