Clarifications on the effect of non-submission by cooperatives of the TINs of its members
(Revenue Memorandum Circular No. 158-2022, issued on December 27, 2022)
This Tax Alert is issued to inform all concerned on the effects of non-submission by cooperatives of the Taxpayer Identification Number (TIN) of its members within six (6) months from issuance of its Certificate of Tax Exemption (CTE).
Pursuant to RMC No. 124-2020, the issuance of CTE shall be permitted despite the incomplete or non-submission of TIN of members of cooperatives, provided that the TIN of the members shall be submitted within six (6) months from the issuance of the CTE.
The following shall be considered as “justifiable reasons” for non-submission of the TIN of members:
1. The TIN not submitted pertains to inactive members, provided the inactive members have already been delisted pursuant to Memorandum Circular (MC) No. 2022-14 of the Cooperative Development Authority (CDA).
The “List of Active Members with TIN and Inactive Members” must be submitted prior to the prescribed due date for its submission, which is a year after the CTE issuance, to support the failure to complete the TIN of members; and
2. The failure was due to “force majeure” (e.g. state of emergency, state of calamity as declared by the National Government and the concerned Local Government Unit). However, the submission should immediately be made once the “force majeure” ceases to exist.
In case the above-mentioned circumstances constituting justifiable reasons cease to exist, failure to provide the TIN of active members shall be subject to the following penalties:
Cooperatives which have been issued CTE despite the non-submission of the TIN of active members are still required to submit the TIN of members to the RDO concerned following the six-month grace period unless the non-submission is due to a justifiable reason as mentioned above.
A “List of Active Members with TIN and Inactive Members” shall be submitted a year after the issuance of the original CTE, and yearly thereafter, to the RDO where the cooperative is registered.
Cooperatives applying for CTE renewal are required to complete and submit the TIN of their active members. It is mandatory that all active members have already secured their TIN upon renewal of the CTE. Failure to submit the TIN of active members will disqualify the cooperative for the renewal of their CTE.
To ensure the compliance of cooperatives with the required submission of TIN of active members, all cooperatives are mandated to submit the “List of Active Members with TIN and Inactive Members” to the concerned RDO within thirty (30) days from the effectivity of RMC No. 158-2022, or 30 days from December 27, 2022. Otherwise, it will be subject to penalties mentioned above.
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