The Supreme Court, in a precedent-setting decision, has ruled that savings and time deposits of credit cooperative members are not subject to 20 percent withholding tax.

The ruling arose from the case of Dumaguete Cathedral Credit Cooperative (DCCCO), which has been ordered by the Court of Tax Appeals (CTA) and the regional office of the Bureau of Internal Revenue (BIR) in Bacolod City to pay for the deficiency withholding taxes on interest from savings and time deposits of its members for the taxable years 1999 and 2000, as well as delinquency interest of 20
percent per annum.

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