BIR Ruling No. 402-2020

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City

Section 5,RA No.8367

RMC No.9-2016

BIR Ruling No. 460-14; BIR Ruling No. 233-14; BIR Ruling No. 384-16 BIR Ruling No. 046-15; OT-0402-2020

JUL 2 0 2020

Port Community Savings & Loan Association (PC-SLAI), Inc. Mezzanine Floor, PPA Bldg., Bonifacio Drive, South Harbor, Port Area Manila 1018

Attention: AIDA P. DIZON] Chairman & President

Madam:

for Certificate of Tax Exemption on behalf of PORT COMMUNITY SAVINGS & LOAN ASSOCIATION (PC-SLAI), INC. pursuant to Republic Act (RA) No. 8367, otherwise known as the "Revised Non-Stock Savings and Loan Association Act of 1997." This refers to your letter dated August 31, 2016 relative to your request from this Office

as a savings and loan association; and that Article II of its Article of Incorporation states that: Drive, Brgy. 652, Zone 68, Port Area Manila 1018, is a corporation duly registered and existing under the laws of the Republic of the Philippines with the Securities and Exchange Commission granted Certificate of Authority by the Central Bank of the Philippines on July 18, 2000 to operate (PC-SLAI), INC. with business address at Mezzanine Floor, PPA Corporate BIdg. A, Bonifacio under SEC Company Registration No. with the Bureau of Internal Revenue (BIR) with Taxpayers Identification No. (TIN) and Certificate of Registration No. It is represented that PORT COMMUNITY SAVINGS & LOAN ASSOCIATION dated March 7, 2000; that it is duly registered dated May 11,2000; that it was

instrumentalities or corporations." operations of a non-stock savings and loan association; encourage industry, frugality and accumulation of savings among its members, to extend loan to its members and/or make investments in the Government or any of latter's political subdivisions. "The purpose for which the corporation is formed is to engage in the

OT-0402-2020

JUL 2 0 2020

In reply, please be informed as follows:

Income Tax

Section 5 of RA No. 8367 provides that:

"SECTION 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."

Based on the foregoing,PORT COMMUNITY SAVINGS & LOAN ASSOCIATION

(PC-SLAD), INC. shall be exempt from income tax with respect to income it receives. Also,

interest income derived by it from its deposit and deposit substitutes are exempt from twenty

percent (20%) final withholding tax. (BIR Ruling No. 046-15 dated February 11, 2015 and BIR

Ruling No. 460-14 dated November 13, 2014)

However, any income derived by PORT COMMUNITY SAVINGS & LOAN

ASSOCIATION (PC-SLAI), INC. 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 internal revenue taxes imposed under National Internal Revenue Code of 1997, as

amended. It is subject to the applicable income tax depending on the classification of its properties

either 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

Intermediaries. --- Gross receipts of other non-bank financial intermediaries (non-

bank financial intermediary not performing quasi-banking functions) doing business

in the Philippines shall be subject to GRT at rates and on items of income provided

hereunder:

(a From interest, commissions, discounts and all other items treated as

gross income under the Code -- 5%

e

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PORT COMMUNITY SAVINGS & LOAN ASSOCIATION (PC-SLAID), INC. Page 3 of 3

of the instruments from which such receipts are derived: well as income from financial leasing, on the basis of remaining maturities b On interests, commissions and discounts from lending activities as

Maturity period is five (5) years or less -- 5% Maturity period is more than five (5) years -- 1%

is generally subject to GRT on income derived from its operations, unless otherwise exempted under special rules. Thus, PORT COMMUNITY SAVINGS & LOAN ASSOCIATION (PC-SLAI), INC. XXX XXX XXX"

Documentary Stamp Tax

Revenue Code of 1997, as amended, particularly on loan agreements, mortgages, pledges, foreclosures and sales, among others. (DST) under the provisions of RR No. 13-2004 implementing Title VII of the National Internal exempt from income tax. Thus,PORT COMMUNITY SAVINGS & LOAN ASSOCIATION (PC-SLAI), INC. as a non-bank financial intermediary, is subject to Documentary Stamp Tax As provided under Section 5 of RA 8367, a non-stock savings and loan association is only

responsible for the remittance of the DST due regardless of who will bear the burden of paying the DST. ASSOCIATION (PC-SLAI), INC. is one of the parties to a taxable transaction, it shall be Moreover, pursuant to RR No. 9-2000, PORT COMMUNITY SAVINGS & LOAN

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

Very truly yours,

ea

Commissioner of Internal Revenue CAESAR R. DULAY 035787

K1-FR-17-1652