REPUBLIC OF THE PHILIPPINES

Department of Finance
Cooperative Devel opment Authority

JOINT ADMINISTRATIVE ORDER NO. 1-2019

RULES I\ND REGULATIONS IMPLEMENTING SECTION 3 OF REPUBLIC ACT

(RA) NO. 10963, OTHERWTSE KNOWN AS THE "TAX REFORM FOR
ACCELERATION AND TNCLUSTON LAW" tN RELATTON TO SECTTON 5(b) OF RA
NO. 8424 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED

WHEREAS, Section 3 of RA No. 10963 requires the Cooperative Development

Authority (CDA) to submit to the Bureau of lnternal Revenue (BlR) a tax incentive
report availed by cooperatives registered with CDA and enjoying incentives under RA
No.9520, which information shall be included in the database created under RA No.
10708, otherwise known as the "Tax lncentives Management and Transparency Act
(TtMTA)',

WHEREAS, Section 244 of RA No. 8424 or the National lnternal Revenue Code, as
amended, provides for the power of the Secretary of Finance, upon recommendation
of the Commissioner of lnternal Revenue, to promulgate all needful rules and
regulations for the effective enforcement of the provisions of the Code.

WHEREAS, Section 4 of RA No. 8424, as amended, provides for the power of the
Commissioner of lnternal Revenue to decide disputed assessments, refunds of
internal revenue taxes, fees or other charges, penalties impoSed in relation thereto, or
other matters arising under the Code or other laws.

WHEREAS, Section 84 of RA No. 10963 or the Tax Reform for Acceleration and
lnclusion (TRAIN)Act, mandates the Secretary of Finance, upon the recommendation
of the Commissioner of lnternal Revenue, to promulgate the necessary rules and
regulations for its effective implementation.

WHEREAS, Section 13 of RA No. 6939 or the Cooperative Development Authority Act

authorizes the CDA to prornulgate such rules and regulations as may be necessary to
implement the Act.

NOW, THEREFORE, these Rules and Regulations are issued as Joint Adrninistrative
Order No. 01-2019 to guide all concerned departments, offices, agencies, ancl
stakeholders, in the implementation of Section 3 of RA 10963.

RULH I
GENERAL PROVISI(f FtrS

Section 1. Declaratian of Policy.* lt is the policy of the State to pronrote fiscal

accountabitity and transparency in the grant and management of tax incentives by
developing means tc promptly measLrre the goirernntent's fiscal exposure on these
 grants and to enable the government to monitor, review and analyze the econornic
impact thereof, and thereby optimize the social benefits of such incentives.

Section 2. Definition of Terms.

a. Bureau of lnternal Reve nue - refers to the government agency entrusted with the
power to assess and collect all national internal revenue taxes, fees and charges,
and the enforcement of all forfeitures, penalties and fines connected therewith, and
hereinafter referred to as the BlR.

,Development Authority refers to the government agency

b. Cooperative
organized and existing by virtue of RA No.6939, whose aim is to promofe the
viability and growth of cooperatives as instruments of equity, social justice and
gconomic development, and hereinafter referred to as the CDA

t. Regr'sfered Cooperatives - refers to any cooperative organized and existing under

Philippine laws and registered with the CDA.

d. Tax Exemption ' refers to fiscal incentives as provided by law to registered

cooperatives.

e. Certificate of Tax Exemptioin Gfq - refers to the ruling issued by the BIR
granting a tax exemption to the cooperative.

f' Annual Tax lncentive Reporf - refers to the report submitted by the registered
cooperatives to the CDA containing claims for income-based tax incentives, value-
added tax and duty exemptions, and other tax incentives as well as other
information as may be required by the CDA. +

g' Conso/idated Annual Tax lncentives Rep ort - refers to the reporl to be subrnitted
by the CDA to the BIR containing informaiion on the income tax, value-added
tax,
and other tax incentives availed of by cooperatives registered and enjoying
incentives under Republic Act No. 6938, as amended ind a comprehensive
dalalinformation of registered cooperatives.

RULE II
COMPLIANCE REQUIREMENTS FOR REGISTERED COOPERATIVES

Section 1. Filing of Tax Refurns and Payment of Tax Liabitities.

- All registered
cooperatives shall file their tax returns and pay their tax liabilities, if any, op or before
the deadline as provided uncler the NIRC, as amended, using the electronic system
for filing and payment of taxes of the BlR.

For purposes of availing income-tax based incentives, only electronically filed tax
returns shall be considered except when manual filing is allowed in accordance with
BIR revenue issuances, in which case, the reiurn manually filed must be duly stamped
by the BIR' Notwithstanding the manual fiiing, the regiitered cooperati,,,cs are still
required to file electronically within thirty days (30) days reckoneci from the time the
electronic filing/payment systenr is operational/availabie. The BIR and the CDA shall

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 Section 2. Submrssion of Annual Tax lncentives Reporf. - All registered
cooperatives which were issued a Certificate of Tax Exemption (CTE) and
availed of
tax incentives shall submit to the CDA the Annual Tax lncentives Report (Annex ,,A,,)
as mandated under Section 4, paragraph (2), of RA No. 10708 and Section
3 of RA
No' 10963' The Reporl shall be duly signed by the Chairman and/or the General
Manager of the concerned registered *opuraiive, and submitted to the cDA
in
accordance with the following schedules:

Accounting Deadline of Cooperative

Period Year Ending On
submission
Calendar Year December 31 April 30 of the succqeding year
Fiscal Year January - 15 days frorn the Oeadlirre ot
November filing of Annual lncorne Tax
Retu rn

RULE III
INCENTIVES MONITORING MECHANISM

section 1. Role of the cDA. - The cDA shalr:

a. Submit to the.BlR, the Registered Cooperative Master List (Annex ,,C,,)

which shall
contain the list of all registered cooperatives within thirty (30)
days after the
approval of these Rules. The Registered Cooperative Master
List shall be updated
every thitly (30) days after the close of each calendar/ fiscal year.

b. Submit to the BIR the Consolidated Annual Tax lncentives

Report (Annex,,B,,),
within sixty (60) days from the statutory deadline for filing of
Annual lncome Tax
Return and payment of taxes due thereon, if any.

The Consolidated Annual Tax lncentives Reporl shall cover

the information
reflected in the Annual lncome Tax lncentives Report filed
cooperatives depending on the accounting period used, whether
by registered
calendar or fiscal
year to wit.

Accounting Deadline of CDA

Period Year Ending On
submission
Calenda; Year December 60 days from the date of
statutory date gf filing
Fiscal Year January - November 60 days from the deadline of
filing cf Annual lncome Tax
Return
C. submit to the BIR a Master List of cooperatives which failed to submit
the Annual
Tax lncentives Report requirecl under Section 2 of these Rules, within
thirty (30)
tlays frorn the deadline of the sribmission of said Report.

d. lssue a Memorandum circular (MC) to all cooperatives for the implementation

of
this JAO.
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 Section 2. Role of BlR. - The BIR shall
a. Submit to the Deparlment of Finance (DOF) the Registered Cooperative Master
List (Annex "C") which shall contain the list of all registered cooperatives within
sixty (60) days after the close of each calendar year;

b. Submit to the DOF on or before August 15 of the current year, the Consolidated
Annual Tax lncentives Report (Annex "B") submitted by the CDA; and

Submit to the DOF within 90 days after the lapse of the close of each calendar
year an updated repoft with income based tax incentives as evaluated and
d eterrnined by the B lR.

d Coltate the list of cooperatives which are non-compliant with the submission of the
required Annual Tax lncentives Report required under Section 2 of these Rules,
for endorsement to the concerned Revenue District Offices (RDOs) for
assessment and collection of applicable taxes.

Section 3. RoIe of DOF. - The DOF shall include in the database created under RA
No. 10708 the reports herein submitted by the BIR to the DOF.

RULE IV
NON.COMPLIANCE WITH FILING REPORTORIAL REQUIREMENTS

Section 1. Effect of failure to submit the Reportorial Requiremenfs by a

Registe red Cooperative. - Submission of the reportorial requirements under Rule ll,
Section 2 of this Order shall be a continuing requirpment for the effectivity of the
Cerlificate of Tax Exemption of a registered cocperative.

Failure to comply with the reporlorial requirements by a registered cooperative shall

have the following effects:

First Offense CTE shall be deemed revoked and registered

CI' cooperative shall be prohibited to avail of tax exemption for a period of one (1)
fr
rn
7r year from the date of revocation
rIt
(?
o c:
n \C, Seconfl Offense CTE shall be deemed revoked and regtstered
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a c*f- cooperative shall be prohibited to avail of tax exemption for a period of three (3)
=)
6
S"rd^r years from the date of revocation
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a

cl CTE shall be deemed revoked and registered

Third Offense
2
= cooperative shalt be prohibited to avail of tax exemption for a period of five (5)
o years from the date of revocation

Fourth Offense Cl E shail be deemed revoked and cooperatirre

shall be prohibiteci from re-application

Regi*stered cooperaiives shall be Iiable for the payment of tares inimediately

upon revocation of the certif.icate of tax exerr-lption, iirclusive of surcharge, interest and
compromise penalty. Upon payment of taxes, registered cooperatives can re-apply
for the issuance of certificate of tax exemption which shall be effective only upon the
lapse of the period of prohibition to avail of the tax exemption.

Pursuant to Ar1. 140,6 (b) and (f) of RAg520, providing information, reports or
other documents to the CDA which the person knows to be false or misleading, and
failure to comply with an order or written instructions issued or given by the CDA are
punishable by imprisonrnent of not less than one (1) year nor more than five (5) years
or a fine of not more than Fifty thousand pesos (P50,000.00) or both at the discretion
of the cour1.

Section 2. Penalty for Non- cornpliance of Government Officiat or Employee with

the provisions of this JAO. - Any government official or employee who iails, without
justifiable reason, to provide or furnish the required tax incentives report or other data
or information within the prescribed period as required under this Joint Adrninistrative
Order shall be penalized, after due process, by a fine equivalent to the official's or
employee's basic salary for a period of one (1) month to six (6) months or by
suspension from government service for not more than one (1) year, or both, in
addition to any criminal and administrative penalties imposable under existing laws.

RULE V
FU NDING

Section 1, Funding. Such amount necessary to carry out the implementation of these
Rules shall be sourced from the regular budget of tl-re agencies involved herein from
current General Appropriations Act.
lt
For this purpose, the DOF, the BIR and the CDA may apply for the supplernental
budget, subject to DBM Rules and Regulations, for the development and/or
enhancement of systems and database with a view to generating data and reports
e lectro n ically.

The CDA, BIR and DOF shall endeavor within a period of three (3) years to autornate
their systems with a view to generating data and reporls electionically. For this
purpose, the said agencies shall be granted their budgetary requirements to me-et the
objectives of these Rules.

RULE VI
INFORMATION DISSEMINATION

Section 1. lnfor"mation Dissemination. This JAO shall be disseminated nationwide.

lnformation campaign and dissemination programs and activities shall be undertaken
by the CDA and the BIR,
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 RULE VII
IRANSITORY PROVISIONS

Section 1. Transitory Provisions. - The CDA shall submit to the BIR a Registered
Cooperative Master List (Annex "C") covering taxable year 201 B within thirty (30)
days after the approval of this JAO.

The CDA shall submitto the BIR a Consolidated Annual Tax lncentives Report (Annex
"8") covering taxable year 2018 on or before September 30,2019. BIR shall submit
to the DOF Annex B on or before December 15,2019.

Forthis purpose, the BIR and the CDA shall undertake to enhance its database system
in order to provide the information on actually availed incentives of registered
cooperatives.

RULE VIII
REPEALING AND EFFECTIVITY CLAUSES

Section 1. Separa bility Clause. - lf any provision of this JAO is subsequently

declared invalid or unconstitutional, other provisions hereof which are not affected
thereby shall remain in full force and effect.

Section 2. Effectivity. - This JAO shall take effect fifteen (15) days following its
publication in a newspaper of general circulation and filing of three (3) copies hereof
with the Office of National Administrative Register (ONAR), University of the
Philippines (UP) Law Center, Diliman, Quezon City *'pursuant to Presidential
Memorandum Circular No. 11 dated 09 October 1992.

triiREAii F i<t.,

HO CARLOS G. UEZ lDt t( i.t4-,

Secretary JUl.l O?
Depaftment of Finance
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RECORDS MGT. DI rs to

RECOMMEN DIN G APPROVAL:

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I.ION. CAESAR R. DULAY HON. ORLAND R. RAVANERA
Commissioner Chairman 2
Bureau c,f Internal Revenue Cooperative velopn rr:nt Authority
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