MANILA, Philippines – The Bureau of Internal Revenue (BIR) has issued a clarification on the extent of tax exemptions granted to non-stock savings and loan associations (NSSLAs).
NSSLAs are non-stock, non-profit institutions that serve like banks to its members, securing deposits and extending credit to them.
Under Revenue Memorandum Circular 9-2016, the tax agency said NSSLAs are only exempted from paying income taxes on income gained from loan interest and bank deposits.
“However, any income derived by it from any of its properties, real or personal, or any activity conducted for profit...is subject to the applicable income tax and other internal revenue taxes...,” the memorandum said.
In addition, the bureau also said NSSLAs are also subject to gross receipts and documentary stamp taxes (DST).
A gross receipts tax of five percent is charged on interest or commissions as part of its gross income.
NSSLAs should pay DST on its loan agreements, mortgages, foreclosures and other official transaction documents it issues.
Under the National Internal Revenue Code, DST may range from 0.5 to 12.5 percent, depending on document issued.
The BIR, under the Aquino administration, has issued several clarifications on tax treatments from income taxes on overseas Filipinos to prize winnings.
The BIR accounts for 80 percent of state revenues every year.
As of November last year, it already collected P1.327 trillion, up 12 percent from a year ago.