Professional Documents
Culture Documents
DEPARTMENT OF FINANCE
Roxas Boulevard Comer Pablo Ocampo, Sr. Street
Manila 1004
5 February 2010
In case of conflict or ambiguity which may arise in the implementation of this Joint
Regulations or in case there is any doubt as to the meaning of any provision of this
regulation or 'any other regulation issued in pursuance to RA 9520, the same shall be
resolved and construed liberally in favor of the cooperatives and their members as
provided for in Article 142 of RA 9520.
d) Capital Assets - refers to the property held by the taxpayer (whether or not
connected with trade or business), but does not include stock in trade of the
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taxpayer or other property of a kind which would properly be included in
inventory of the taxpayer if on hand at the close of the taxable year, or property
held by the taxpayer primarily for sale to customers in the ordinary course of
his trade or business, or property, used in the trade or business, of a character
which is subject to the allowance for depreciation.
For internal revenue tax purposes, said Certificate of Good Standing is one of
the essential requirements for the grant of the Certificate of Tax
Exemption/Ruling provided for in the next paragraph.
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m) Transaction with members - refers to the cooperative activity that
provides goods and services to members where the cooperative generates net
savings/surplus,
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f) Multipurpose Cooperative - is one which combines two (2) or more
of the business activities of these different types of cooperatives;
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r) Transport Cooperative - is one which includes land and sea
transportation, limited to small vessels, as defined or classified under the
Philippine maritime laws, organized under the provisions of this Code.
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a) Income Tax imposed by Title II of the NIRC, as amended;
e) Excise Tax under Title VI of the NIRC, as amended, for which it is directly
liable;
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taxes for which it is liable as enumerated in Section 7 of this Joint Rules
and Regulations;
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Exempt transactions shall include sales made by a duly
registered agricultural cooperative organized and operated by
its members to undertake the production and processing of raw
materials or of goods produced by its members into finished or
processed products for sale by said cooperative to its members
and non-members.
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reinvestment to socio-economic projects within the area of operation of
such cooperative.
a.) Capital Gains Tax from sale of shares of stock or sale, exchange or other
disposition of real property classified as capital assets;
c) VAT billed on purchases of goods and services, except the VAT on the
importation by agricultural cooperatives of direct farm inputs, machineries and
equipment, including spare parts thereof, to be used directly and exclusively in
the production and/or processing of their produce, pursuant to Section 109(L) of
the NIRC, as amended. All tax free importations shall not be transferred to any
person until five (5) years, otherwise, the cooperative and the transferee or
assignee shall be solidarity liable to pay twice the amount of the tax and/or the
duties thereon;
e) All other taxes for which cooperatives are directly liable and not otherwise
expressly exempted by any law.
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SECTION 11. TAXABILITY OF MEMBERS/SHARE HOLDERS OF
COOPERATIVES. - All members of cooperatives shall be liable to pay all the
necessary __ internal revenue taxes under the NIRC, as amended, except for the
following:
a) Any tax and fee, including but not limited to final, tax on member's
deposits or fixed deposits (otherwise known as share capital) with
cooperatives, and documentary tax on transactions of members with the
cooperative; and
b) Patronage Refund which includes all refunds, returns or rebates of the net
savings generated from the operation of the cooperative.
Such cooperatives are required to be registered with the BIR, but shall be exempt from
the payment of the annual registration fee of P500.00.
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c) A certified true copy of the current Certificate of Good Standing from CD A,
effective on the date of application. No application for exemption will be
processed in the absence thereof.
All duly registered cooperatives under RA 9520 shall apply for a Certificate of Tax
Exemption/Ruling within sixty (60) days counted from the date of issuance of
certificate of registration.
Exemption from taxes herein stated shall apply to the duly-registered cooperatives on
the year the certificate of tax exemption/ruling was issued. However, for the initial
issuance of the Certificate of Tax Exemption/Ruling under RA 9520, the effectivity of
such Certificate of Tax Exemption/Ruling issued shall commence from the year RA
9520 took effect: Provided, That the cooperative has registered with the CDA as
provided for under Article 144 of RA 9520.
For applications for tax exemption not filed within the prescribed period, the late
applicants shall be subjected to internal revenue taxes prior to the issuance of the
Certificate of Tax Exemption/Ruling; however they can apply for tax credit/refund of
taxes previously paid from the date of registration with the CDA up to the issuance of
the Certificate of Tax Exemption/Ruling, subject to the rules and procedures for
processing tax credit/refund. The BIR shall act on the request for tax refund of taxes
previously paid within one hundred twenty (120) days from submission of the
complete documents in support of the application filed.
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submitted to the BIR on or before the 15th day of the fourth month (April 15)
following the close of the calendar year.
c) A certified true copy of the current Certificate of Good Standing from CDA,
effective on the date of application. No application for exemption will be
processed in the absence thereof or submission of an expired Certificate of
Good Standing;
g) Certification under oath of the list' of members and the share capital
contribution of each member; and
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(2) in CD-R or DVD-R disks, using a format such as an Adobe Acrobat (.pdf) file.
The Revenue District Office shall check if the copies are identical, make
distinguishing marks on both copies upon submission to ensure that the records are
not tampered with/substituted, and return 1 copy to the submitting cooperative. In
cases where the Revenue District Office has no CD-R/DVD-R optical drives, the
copies may be submitted on floppy disks/other media subject to the distinguishing
marks as stated above.
The formal investigation shall commence upon the issuance of the letter of
Authority/Letter-notice by the Commissioner or his authorized representative and the
authorization from the, CDA within the period prescribed above.
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Applications for Tax Exemption pending with the BIR shall be acted upon by the
concerned Regional Director having jurisdiction over the cooperative within forty-five
(45) days from the effectivity of this Joint Rules and Regulations.
All other revenue rulings, regulations, and other issuances, which are inconsistent with
the provisions of this Joint Rules and Regulations, are hereby repealed or modified
accordingly.
SECTION 20. SEPARABILITY CLAUSE. - Should any part of this Joint Rules
and Regulations be held unconstitutional or invalid, the validity of the remaining
provisions not affected thereby shall remain in force and effect.
SECTION 21. EFFECTIVITY. - This Joint Rules and Regulations shall take effect
upon its approval.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval: