Philippines Tax Agency Issues Ruling on Interest Income Taxation of Non-Stock Savings, Loan Associations

The Philippine Bureau of Internal Revenue July 3 issued BIR Ruling No. 377-2020, on the interest income taxation of non-stock savings and loan associations (NSSLAs). A registered NSSLA requested an exemption from the 20 percent withholding tax on the interest income from bank deposits and deposit substitutes. The tax agency found that: 1) an NSSLA’s income, excluding income from owned properties and profit-generating activities, is tax-exempt and the 20 percent withholding doesn’t apply to the interest income from bank deposits and deposit substitutes; and 2) an NSSLA is subject to a 5 percent gross receipts tax on interest income, including ...