TAXABILITY OF COOP MEMBERS 1. Patronage Refund – NON-taxable 2. Dividends/Interest on share capital – subject to 10% final tax, only if the coop is tax-exempt 3. Dividends plowed back as share capital (stock dividend) – is non-taxable if declared as such by the BOD not as a wish of individual members 4. Documentary stamp tax (P1 for every P200) for shares of stocks acquired – payable if coop is tax exempt 5. Compensation, Honorarium and allowances – taxable if not exempt under RR# & RR (dimi nimis” benefits) BOD – subject to 20% final tax Employees – based on tax rate on compensation

TAXABILITY OF COOP MEMBERS Some of the tax-exempt “dimi nimis” benefits: Rice allowance max. of 1T/mo. Laundry allow. max. of 300/mo. Medical allow. max. of 125/mo. Actual medical reimbursement 10T/mo Clothing Allowance max. of 3T/year

COOP is a BIR Withholding Agent The exemption of the coop does not extend to its individual members, thus members are liable to pay taxes. The cooperative is a BIR withholding agent, thus, it is tasked to collect and remit taxes withhold from members.

TAXABILITY OF COOP’S PASSIVE INCOME(BIR RR # ) All passive income of the coop are subject to taxes: 1. 20% final income tax on interest from bank deposits & yields, royalties, trust funds % final tax on foreign currency deposit 3. Capital gains tax on sales or exchanges of real property classified as capital assets or shares of stock 4. Documentary stamps(P1 every P200) on transactions with non-members where accumulated reserve and undivided net surplus exceed 10M 5. VAT billed on purchases 6. All other taxes for which the coop is not expressly exempted by any law 7. All transactions not related to coop’s main activity except donation.

Other Information Maximum share capital contribution of each member for: Creditshould be 20% of subscribed capital.