TAXATION for COOPERATIVES Presented by MS SUSAN D
TAXATION for COOPERATIVES Presented by: MS. SUSAN D. TUSOY, cpa, mps Asst. Chief, Assessment Division 1
RA 6938 Cooperative Code of the Phil. RA 9520 o o • • RMC No. 48 -91 dated June 18, 1991. RR No. 20 -2001 dated 11 -12 -01 RMC 12 -2010 dated Feb. 11, 2010 RMC 19 -2010 dated March 5, 2010 RMO 76 -2010 RMC 81 -2010
a. ) Transact business with members only; b. ) Transact business with both members & nonmembers ◦ With accumulated reserves and undivided net savings of not more than P 10, 000. 00 ◦ With accumulated reserves and undivided net savings of more than P 10, 000. 00
Shall be exempt from paying any taxes & fees: ◦ Income Tax ◦ Value Added Tax ◦ Percentage Tax ◦ Donor’s tax on donations to duly accredited charitable research and educational institutions and reinvestment to socioeconomic projects within the area of operation of the cooperatives
◦ Excise Tax ◦ Documentary Stamp Tax when the other party to the taxable document/transaction who is not exempt shall be the one directly liable for the tax ◦ Annual Registration Fee of P 500. 00
◦ All taxes on transactions with insurance companies & banks 20% final tax on interest deposits 7. 5% final income tax on EFCDS. ◦ Electric coop duly registered with the Authority
I. With accumulated reserves and undivided net savings of NOT MORE THAN P 10 Million Same exemption from all national internal revenue taxes for which these cooperatives are liable as enumerated under Sec. 7 of this Joint Rules & Regulations.
II. With Accumulated reserves and undivided net saving of MORE THAN P 10 million Classified again into two: 1. Business transactions with members – exempt from all National Internal Revenue Taxes for which it is liable as enumerated in Sec. 7 of this Joint Rules & Regulations.
Cont…. 2. Business transactions with non-members shall pay the following taxes at the full rate: o Income Tax o Value Added Tax (except Sec. 109 par. (L), (M) & (N) of the NIRC) o Percentage Tax on all sales of goods/or services o All other internal revenue taxes unless otherwise provided by the law.
Taxability/Exemption of Cooperatives (Transacting w/ members & non-members) Cont…. Entitled to limited or full deductibility of donations Entitled to an exemption on taxes on transactions with insurance companies and banks o 20% final tax on interest deposits and o 7. 5% final tax on interest income derived from depository bank under the EFCDS.
Sales by agricultural cooperatives duly registered with the CDA to their members as well as sale of their produce, whether in its original state or processed form, to non-members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production/or processing of their produce. (Sec. 109 (L))
Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered with the (CDA. Sec. 109 (M))
Sales by non-agricultural, non-electric and non -credit cooperatives duly registered with the CDA: Provided, That the share capital contribution of each member does not exceed P 15, 000 and regardless of the aggregate capital and net surplus ratably distributed among the members. (Sec. 109(N))
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