QuestionsQuestions (BIR REVENUE MEMORANDUM ORDER NO. 76-2010)
It is issued pursuant to Article 144 of the Cooperative Code (RA No. 9520), in relation to Sections 4 and 244 of the NIRC of 1997, as amended, and consistent with the Joint Rules and Regulations implementing Articles 60, 61, and 144 issued on Feb. 5, 2010.
After it secures a new Certificate of Registration from the CDA under RA No. 9520. Even cooperatives previously confirmed under RA 6938 and RA 6939 must obtain a new CDA certificate under RA 9520 before applying.
Applications are acted upon by the Revenue District Offices (RDOs) and Revenue Regions with jurisdiction over the cooperative’s principal place of business, instead of processing at the National Office, to streamline and expedite processing.
The cooperative must update its BIR registration with the RDO having jurisdiction over its principal place of business as a condition for issuance.
It must submit BIR Form No. 1945 and certified true copies of: (1) Articles of Cooperation and By-laws (certified by CDA), (2) new CDA Certificate of Registration under RA 9520, (3) current CDA Certificate of Good Standing, and (4) BIR Certificate of Registration. It must also submit an original oath certification of the list of members with TIN and capital contributions, with allowance to temporarily use NSO/other ID or CTC for members without TIN on initial submission.
For renewal, it must submit BIR Form 1945 plus: (1) certified true copy of CDA Certificate of Registration under RA 9520, (2) certified true copies of latest Articles and By-laws, (3) certified true copy of current/valid CDA Certificate of Good Standing (no processing if absent or expired), and (4) certified true copy of latest audited financial statements of the immediately preceding year by a BIR-accredited independent CPA.
The RDO (or designated Revenue Officer of the Day) pre-evaluates using the pre-evaluation sheet. The RDO must refuse to accept the application when not properly supported by required documents.
The entire docket, with the necessary pre-evaluation sheet and endorsement letter report, must be transmitted within five (5) working days from filing of the duly-accomplished BIR Form 1945 with complete documentary requirements.
The Regional Director signs the certificate after review by the Chief, Legal Division. After approval/signing, the certificate is transmitted to the Legal Division for numbering with a specific code pattern indicating sequence, calendar year, revenue region, and RDO number.
It is exempt from taxes and fees, including income tax, VAT, percentage tax, donor’s tax (for covered charitable research/education initiatives and reinvestment to socio-economic projects within area of operation), excise tax for which it is directly liable, documentary stamp tax (with rule on liability of the non-exempt other party), annual registration fee of P500, taxes on transactions with insurance companies and banks (including specified final taxes), and (for electric cooperatives) specific VAT exemptions related to systems loss and lifeline subsidy.
Transactions with members remain exempt from all national internal revenue taxes enumerated under Section 7 of the JRR, while transactions with non-members are subject to specific rules: (1) income tax on net surplus from non-member transactions with prescribed base, (2) VAT treatment depending on the cooperative type and NIRC provisions, (3) percentage tax on sales to non-members (subject to exceptions), and (4) other internal revenue taxes unless otherwise provided.
All income not related to the main/principal business(es) under its Articles of Cooperation is subject to the appropriate taxes under the NIRC, regardless of whether the cooperative transacts purely with members or with both members and non-members.
Yes. The certificate is valid for five (5) years from the date of issue or date of effectivity, unless sooner revoked or cancelled.
It must accomplish and file BIR Form No. 1945 at least two (2) months prior to the expiration date, following the same documentary and processing rules.
They must yearly submit to the appropriate RDO, with the Annual Information Return (BIR Form 1702) due on or before the 15th day of the fourth month after the close of the calendar year: (1) current CDA Certificate of Good Standing, (2) an oath certification by Chair/GM on cooperative type, principal activities, whether dealing with members only or both, accumulated reserves, net surplus, and that at least 25% of net surplus is returned to members via interest on share capital/patronage refund, (3) original yearly summary of transactions clearly showing member vs non-member transactions, and (4) oath certification of list of members with TIN and share capital contribution as of year end.
It is a ground for cancellation/revocation of the Certificate of Tax Exemption, especially if the cooperative fails to submit or submits an incomplete summary as required.
RDOs submit a yearly Cooperative Profile Report within 10 days following filing of BIR Form 1702 to the Regional Director for onward submission to Assessment Service. Regional Directors also submit a monthly summary report of all certificates issued by the region (with copies) to the Assistant Commissioner, Legal Service by the 15th day of the following month.