It refers to the accumulated amount of money annually deducted from the net surplus, which shall be less than 50% for the first five years of operation after registration and at least 10% of the net surplus thereafter, intended not for the allocation or distribution to the members but for the protection and stability of the cooperative.

The following are the legal basis of tax exemption of cooperatives except:

Duly registered cooperatives dealing/transacting business with members only shall be exempt from paying Annual Registration Fee of P500.00.

Sale by agricultural cooperatives to non-members can only be exempted from VAT if the producer of the agricultural products sold is the cooperative itself.

The Certificate Tax Exemption/Ruling shall be valid for a period of _____ from the date of issue or date of effectivity as provided under Section 13 hereof, and during such period that the Cooperative is in good standing as ascertained by the CDA on an annual basis.

Pursuant to the TRAIN Law, the BIR is no longer required to secure authorization from the Cooperative Development Authority (CDA) before the examination of the books of accounts and other accounting records of a cooperative.

All income of cooperatives not related to the principal business under its Articles of Cooperation shall be subject to all the appropriate taxes. This is applicable to all types of cooperatives whether dealing purely with members or both members and non-members.

Upon the filing of application for Certificate of Tax Exemption, in case the TlNs of the members cannot be supplied yet, will that result in the denial of the application?

Are statutory contributions made by the Cooperatives as employer excluded from the gross income?