BIR Ruling No. 403-2020

REPUBLIC OF^THE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City

01-0403-2020 Section 5, Republic Act No. 8367; Revenue Memorandum BIR Ruling No.398-2018 Circular No. 9-2016

7th Floor, ACE Building, Dela Rosa cor. Rada St., Legaspi Village, Makati City BOTTLERS EMPLOYEES SAVINGS AND LOAN ASSOCIATION, INC. JUL 2 0 2020

Attention: MA. CARMEN LIMJAP REFORMADO President/CEO

Gentlemen:

otherwise known as "An Act Providing for the Regulations of the Organization and Operation of Non-Stock Savings and Loan Association". This refers to your request for tax exemption pursuant to Republic Act (RA) No. 8367.

Association, Inc. with Taxpaver's Identification No. (TIN) Documents submitted disclosed that Bottlers Emplovees Savings and Loan and Certificate

stock savings and loans association; to encourage industry, frugality and accumulation of prerogatives and privileges inherent in and granted to corporations and to such savings and Sentral ng Pilipinas issued a Certification dated April 07, 2014, attesting that Bottlers association under its supervision pursuant to the provisions of the New Central Bank Act and savings among members; to extend loans to members and/or make investments in the securities of productive enterprises or in securities of the Government or any of its political subdivisions, instrumentalities or corporations; and generally to exercise and execute all the powers, loan association, primarily for the benefit and interest of its members; " and that the Bangko Employees Savings and Loan Association, Inc. is a duly registered savings and loan the General Banking Law of 2000. of Registration No. duly organized under the laws of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Company Registration No. purpose for which the corporation was incorporated is "to engage in the operations of a non- dated January 01,1997, is a non-stock corporation : that the primary

In reply, please be informed that Section 5 of RA No. 8367 provides that:

imposed under the National Internal Revenue Code. 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 the disposition thereof, is subject to the corresponding internal revenue taxes properties, real or personal, or any activity conducted for profit, regardless of "SECTION 5. Tax Exemption. - An Association shall be exempt from

the shares of its members from the net income of the Associations shall be exempt from income tax. ' Interest earnings on deposits of members with Associations, as well as

shall be exempt from income tax with respect to income it receives, including interest income Based on the foregoing, Bottlers Employees Savings and Loan Association, Inc.

BOTTLERS EMPLOYEES SAVINGS AND LOAN ASSOCIATICN, INC. O1-0403 - 2020 JUL 2 0 2020

derived from its deposit and deposit substitutes which shall be exempt from twenty percent (20%) final withholding tax.

as further clarified in Revenue Memorandum Circular (RMC) No. 9-2016, provides for the depending on the classification of its properties either as capital or ordinary assets. income derived from its operations. Association, Inc. of its properties (real or personal) is subject to applicable income tax implementing Section 122 of the National Internal Revenue Code (NIRC) of 1997, as amended. imposition of gross receipts tax (GRT) on Non-Bank Financial Intermediaries (NBFIs). Since Bottlers Employees Savings and Loan Association, Inc. is a NBFI, it is subject to GRT on However, any, disposition made by Bottlers Employees Savings and Loan Moreover, Section 4 of Revenue Regulations (RR) No. 9-2004, as amended.

agreements, mortgages, pledges, foreclosures and sales, among others. 13-2004, implementing Title VII of the NIRC of 1997, as amended, particularly on loan Likewise, it is subject to documentary stamp tax (DST) under the provisions of RR No.

of who will bear the burden of paying of DST pursuant to RR No. 9-2000. parties to a taxable transaction, it shall be responsible for the remittance of DST due regardless Finally, if Bottlers Employees Savings and Loan Association, Inc. is one of the

if 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,

Very truly yours,

$K-1-LMAT Commissioner of Internal Revenue waw CAESAR R. DULAY 035796 O

PAGE2OF2