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    RMC No 9-2016 - Clarification On Taxability of NSSLA For Income Tax, GRT and DST

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    digna
    This document is a revenue memorandum circular from the Philippine Department of Finance that clarifies the tax treatment of Non-Stock Savings and Loan Associations (NSSLAs) under Philippine law. It states that NSSLAs are exempt from income tax on income received, but are subject to income tax on income derived from properties or profit-making activities. It also states that NSSLAs, as non-bank financial intermediaries, are subject to gross receipts tax on income from operations and documentary stamp tax on certain transactions like loans and mortgages.

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    RMC No 9-2016 - Clarification On Taxability of NSSLA For Income Tax, GRT and DST

    Uploaded by

    digna
    54 views3 pages
    This document is a revenue memorandum circular from the Philippine Department of Finance that clarifies the tax treatment of Non-Stock Savings and Loan Associations (NSSLAs) under Philippine law. It states that NSSLAs are exempt from income tax on income received, but are subject to income tax on income derived from properties or profit-making activities. It also states that NSSLAs, as non-bank financial intermediaries, are subject to gross receipts tax on income from operations and documentary stamp tax on certain transactions like loans and mortgages.

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    RMC No 9-2016 - Clarification on Taxability of NSSLA for Income Tax, GRT and DST

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    This document is a revenue memorandum circular from the Philippine Department of Finance that clarifies the tax treatment of Non-Stock Savings and Loan Associations (NSSLAs) under Philippine law. It states that NSSLAs are exempt from income tax on income received, but are subject to income tax on income derived from properties or profit-making activities. It also states that NSSLAs, as non-bank financial intermediaries, are subject to gross receipts tax on income from operations and documentary stamp tax on certain transactions like loans and mortgages.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    54 views3 pages

    RMC No 9-2016 - Clarification On Taxability of NSSLA For Income Tax, GRT and DST

    Uploaded by

    digna
    This document is a revenue memorandum circular from the Philippine Department of Finance that clarifies the tax treatment of Non-Stock Savings and Loan Associations (NSSLAs) under Philippine law. It states that NSSLAs are exempt from income tax on income received, but are subject to income tax on income derived from properties or profit-making activities. It also states that NSSLAs, as non-bank financial intermediaries, are subject to gross receipts tax on income from operations and documentary stamp tax on certain transactions like loans and mortgages.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

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    Republic of the Philippines ;c-\.


    Depafirnent of Finance
    BURtrAU OF {NT'ERNAL REVENUE
    Quezon City

    .lanuarv 12.2016

    REvtiNuE MtrMoRANEUL,g c{F{cLIlAR No. Q 2'D I i,,

    SL]E}J['CT Ciarific:rtion on Taxatrility +f fdon-Stock S:tvings amci Loan


    Associations for Furposes ofl Xncome T:lx, (iross Iteceipts T;lx
    :rnd tr)ocumentary Stztrrnp Tax

    T() All Revenue Otficials, Ilmployees and Other Concerned

    'fhis Circular is issued to claril,v the taxability of Non-Stock Savings and Loan Associations
    f\5--:iLAs) r"or incorle. r,alue-added ancl docuil"'ntat-v stamp tax purpo:;es.

    tsACKGR.OUNI)

    Under -lection 3 of l{epublic Act (RA) No. 8367 " ot}reru,ise knou'n as "Revised Non-Stoc1<
    Sarings and Loan Associalion Act of 799J", Non-Stock Savings and Loan Associations (NSSl,Asl
    shall mean non-stock. non-profit corpolation engaged in the business of accumulating the savings of
    its rrrcnrbers and using such accurluiations lot'loans to metnbers to selvicc thc necds of irouseholcls
    bv proritlin-u long lernr finanoing 1br houre building and develclpment and for personal finance. For
    regtrlatorl, plrq)oses. NSSLAs ale under the direct supenision and regulation of the Bangko Sentral
    ng Pilipinas (BSP). Thev are classified as Non-baitk Financjal Iniemrediaries (NBFIs)',rnder the
    BSP l\:ianual cf Regulations.

    {1\COME T'AX

    Pulsuant to Section 5 of RA No. 8367" NSSI-A shall be exenrpt from inconre tax rvith respecl
    to income it receives. inclnding intercst on its deposits with an-r,bank. However, anv inconre derivcd
    b,r, i1 fi'om any, of its properties, real or personal. or anlr activit},.conducted 1or profit. r-egardless of 1i-re
    disposition thereoL is sub.ject to the applicable incorne tax ancl other internal revenrre tares irnposed
    under the 1997 Na.1ional Intcmal Rcvenue Codc (NJi{C). as anrended.

    Thus, any disposition made by NSSLAs of its properties (rea1 or personal) is subject to the
    applieable income tax depending,on the classification of its properties either capital or ordinary asset.
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    GR.OSS RECET}]TS T,{X

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

    "SEC. 4. IMPOSITIO|V AF G,t#,S^S R.ECEIPTS TAX ON OTIIER NON-


    BAI\{K FIMNCIAL II{TERM{EBM,ffifE^S. Gyoss receipts of other non-bank
    .financial intermediaries (non-bank financiol inlerntediary not perJbrming quasi-banking
    functions) doing business in the Philippines shcll be subject to GRT at rates and on
    itents of income provided hereunder:

    (a) From interest, cotttntissions, discounts and


    all ather items treated as gross income
    under the Code ------------- 5%

    (b) On interest, contntissions and discounts


    from lending acti:tities' as v,ell as income
    frorufinancial leasing, on the basis of
    remaining maturities of the instruments -fiom
    v,hich such receipts are derived:

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


    Maturity period is more thanfive (5) years ----- 1%

    -\-"rJ"r

    )'lothing in these Regulations shall preclude fhe Commissioner front impo,s'ing the
    saftle tax herein provided on persons' performing sirnilar activities. "

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

    DGCUMENTAIT.Y STAMP TAX

    As provided under Section 5 of RA No. 8367. NSSLA is only exempt liom income tax.
    Thus, NSSLAs as NBFis are subject to Documentary Stamp Tax (DST) under the provisions of RR
    No. 13-2A04 irnpiementing Title VII of the NIRC. as amended, particularly on loan agreements,
    mortgages, pledges, foreclosures and sales) among others.
    IIIIBEAU f;i il,T'iril,'i,:, Iiil{i,Xfi
    IIECORIIS I',iG'L'. ij j r'ii)"tCijt
    {,-l o ' ro. 1t4 ,

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    2
    7

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

    Any issuances contlai"y to the provisions contained herein are null and void for being conttarl'
    to the provisions of RA No. 8367 and the NIRC. as anrended.

    - Ali rcvenue officers znd employres mrhereby enjoined to -gi-ve this Circularas--wide- a
    publicity as possible.

    KIi\{ S. .IACTN
    a,
    E{ENARES
    C onrmis sioiier. of Internal Revenue
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