RMC No. 9-2016 — Clarifies the taxability of Non-Stock Savings and Loan Associations for purposes of Income Tax, Gross Receipts Tax and Documentary Stamp Tax

BUREAU OF INTERNAL REVENUE Republic of the Philippines Departrnent of Finance BURFAU DF INTERNAL REVENUE RECORDS MGE DVISION RECEIVED JAN 28 2016 4:35PM Uaegr

Quezon City

January 12, 2016

REVENUE MEMORANDUM CIRCULAR NO._ G- 30/(

SUBJECT Clarification on Taxability of Non-Stock Savings and Loar

Associations for Purposes of Income Tax, Gross Receipts Tax and Documentary Stamp Tax

TO All Revenue Officials, Employees and Other Concerned

Ihis Circular is issued to clarify the taxability of Non-Stock Savings and Loan Associations (NSsLAs) for income, value-added and documentary stamp tax purposes

BACKGROUND

Savings and Loan Association Act of 1997", Non-Stock Savings and Loan Associations (NSSLAs) Under Section 3 of Republic Act (RA) No. 8367. otherwise known as "Revised Non-Stock

shall mean non-stock, non-profit corporation engaged in the business of accumulating the savings of its members and using such accumulations for loans to members to service the needs of households by providing long term financing for home building and development and for personal finance. For regulatory purposes. NSSLAs are under the direct supervision and regulation of the Bangko Sentral ng Pilipinas (BSP). They are classified as Non-bank Financial Intermediaries (NBFIs) under the BSP Manual of Regulations.

INCOME TAX

to income it receives, including interest on its deposits with any bank. However, any income derived by it 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 Pursuant to Section 5 of RA No. 8367, NSSLA shall be exempt from income tax with respect

under the 1997 National Internal Revenue Code (NIRC), as amended.

applicable income tax depending,on the classification of its properties either capital or ordinary asset. Thus, any disposition made by NSSLAs of its properties (real or personal) is subject to the

GROSS RECEIPTS TAX

Section 4 of Revenue Regulations (RR) No. 9-2004, as amended, implementing Section 122 of the NIRC, as amended, provides for the imposition of Gross Receipts Tax (GRT) on NBFIs Section 4 of RR No. 9-2004 reads:

BANK FINANCIAL INTERMIEDIARIES. "SEC. 4. IMPOSITION OF GROSS RECEIPTS TAX ON OTHER NON- Gross receipts of other non-bank

functions) doing business in the Philippines shall be subject to GRT at rates and on financial intermediaries (non-bank financial intermediary not performing quasi-banking

items of income provided hereunder:

a all other items treated as gross income From interest, commissions, discounts and under the Code 5 %

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

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

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same tax herein provided on persons perforiming similar activities. Nothing in these Regulations shall preclude the Commissioner from impossing the

As a NBFI, NSSLA is generally subject to GRT on income derived from its operations. unless otherwise exempted under special rules.

DOCUMENTARY STAMP TAX

As provided under Section 5 of RA No. 8367. NSSLA is only exempt from income tax

No. 13-2004 implementing Title VII of the NIRC, as amended, particularly on loan agreements. Thus, NSSLAs as NBFIs are subiect to Documentary Stamp Tax (DST) under the provisions of RR

mortgages, pledges, foreclosures and sales, among others. DUREAU OF HTARNAJ REVENR RECORDS MGTDIVSON JAN 2 8 2015 4351.M

RECEIVEW

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Pursuant to RR No. 9-2000, whenever a NSSLA is one of the parties to a taxable transaction. the NSSLA shall be responsible for the remittance of the DST due regardless of who will bear the burden of paying the DST.

Any issuances contrary to the provisions contained herein are null and void for being contrary to the provisions of RA No. 8367 and the NIRC, as amended.

All revenue officers" and-employees are hereby enjoined to give this Circular as~wide a publicity as possible.

KIM S. JACINTO-HENARES Commissiorier of Internal Revenue

038622 BURFAU CF TTRNAL RRYENUE RECORDS MGTDIVISION JAN 2 8 2016 4:35 PM Uaegh RECEIVED

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