Tax Digest
Volume 8,
Series 50
NSSLA subject to OPT & DST

The Bureau of Internal Revenue (BIR) reminded all Non-Stock Savings and Loans Associations (NSSLAs), a non-stock, non-profit corporation engaged in the business of accumulating the savings of its members and using such accumulations for loans to member for their benefit, that they are classified as Non-bank Financial Intermediaries (NBFIs) under the BSP Manual Regulations.

Accordingly, the NSSLAs are exempted from income tax, including interest received from any banks with respect to their deposits. However, they are subject to taxes under the National Internal Revenue Code of 1997 (NIRC) from any income derived using their properties, real or personal, or any activity conducted for profit, regardless of the disposition thereof. Moreover, the NSSLA is subject to Gross Receipts Tax (GRT) under Section 4 of Revenue Regulation (RR) No. 9-2004, as amended, implementing Section 122 of the NIRC, to wit:

“Sec. 4. Imposition of Gross Receipts Tax On Other Non-Bank Financial Intermediaries. – Gross receipts of other non-bank financial intermediaries (non-bank financial intermediaries not performing quasi-banking functions) doing business in the Philippines shall be subject to GRT at rates and on items of income provided hereunder:

  1. From interest, commissions, discounts and all other items treated as gross income under the Code……………....5%
  2. On interest, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of the instruments from which such receipts are derived:

    Maturity period is five (5) years or less......... ......................................5%
    Maturity period is more than five (5) years.………………….......…………..1%
    xxx xxx xxx

    Nothing in these Regulations shall preclude the Commissioner from imposing the same tax herein provided on persons performing similar activities.”

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

Concomitantly, NSSLA as a NBFI is subject to documentary stamp tax (DST) under the provision of RR No. 13-2004 implementing Title VII of the NIRC, as amended, particularly on loan agreements, mortgages, pledges, foreclosures and sales, among others. Finally, in case NSSLA is one of the parties to a taxable transaction, the NSSLA shall be responsible for the remittance of the DST due, regardless of who will bear the burden of paying the DST pursuant to RR No. 9 2000.

Revenue Regulations No. 9-2016, January 12, 2016
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