Are Cooperative Transactions With Members Exempt From Documentary Stamp Tax? RA No. 9520 Articles 60–61 Explained

A duly registered cooperative’s transactions with its own members — such as a loan agreement between the cooperative and a member-borrower — are exempt from documentary stamp tax (DST) under Articles 60 and 61 of Republic Act (RA) No. 9520, the Philippine Cooperative Code of 2008. The exemption is specifically tied to member transactions: it does not extend to the other party when a cooperative transacts with someone who is not a member, and DST on that separate transaction generally still applies in the ordinary way.

What do Articles 60 and 61 of RA No. 9520 actually exempt? #

Articles 60 and 61 of the Philippine Cooperative Code establish that transactions between a cooperative and its own members are not subject to any taxes and fees, including — but not limited to — final taxes on members’ deposits and documentary stamp tax on the instruments those member transactions produce. The provision, as summarized in BIR administrative guidance and industry commentary on the Code, reads:

“Transactions of members with the cooperative shall not be subject to any taxes and fees, including but not limited to final taxes on members’ deposits and documentary [stamp] tax.”

— summary of Articles 60–61, Republic Act No. 9520 (the Philippine Cooperative Code of 2008), as reflected in BIR-related guidance implementing the provision

In practical terms, this means a loan agreement, a promissory note, or a certificate of time deposit executed between a duly registered cooperative and one of its own members — documents that would otherwise carry DST under NIRC provisions such as Section 179 for debt instruments — is exempt from that DST when the transaction is genuinely between the cooperative and its member.

Does the exemption follow the cooperative into every transaction it makes? #

No — the BIR has specifically clarified that Article 61 exempts the cooperative on transactions with its own members, but it does not extend that exemption to the other party when the cooperative deals with someone who is not a member. If a cooperative enters into a transaction with an outside bank, a non-member supplier, or another entity, the DST that would ordinarily apply to that instrument remains the responsibility of whichever party the general DST rules assign it to — the cooperative’s own member-transaction exemption does not spill over and shield an unrelated counterparty from its separate DST obligation.

How does this relate to a cooperative’s broader tax exemption package? #

RA No. 9520 grants a duly registered cooperative several distinct exemptions — income tax, VAT, percentage tax, and documentary stamp tax among them — but each is a separate exemption tied to its own conditions, not one blanket “cooperatives don’t pay tax” rule. The DST exemption under Articles 60–61 covers member transactions specifically, while the cooperative’s income tax exemption (also under RA No. 9520) depends on separate factors, including whether the cooperative transacts only with members or also with the general public, and — for transactions with non-members — the size of its accumulated reserves and undivided net savings. See Cooperatives: BIR Tax Exemption Under RA No. 9520 for how the income tax and VAT side of that broader exemption package works; this DST-specific exemption sits alongside it as its own distinct rule, not a restatement of the same one.

Does a cooperative need to apply for this exemption, or is it automatic? #

A duly registered cooperative secures a BIR Certificate of Tax Exemption/Ruling — generally applied for within sixty (60) days of the cooperative’s Certificate of Registration being issued — to formally document its tax-exempt status, including for DST on qualifying member transactions. Relying on the statutory exemption language alone, without the corresponding BIR certificate on file, leaves a cooperative exposed if a DST assessment on a member transaction is later challenged, since the certificate is the documentary proof a cooperative and its examining revenue officer both rely on to confirm the exemption actually applies to a given transaction.

Worked example: a member loan versus a non-member loan on the same cooperative’s books #

Bayanihan Multipurpose Cooperative, a duly registered cooperative with a current BIR Certificate of Tax Exemption, extends two loans in the same month:

Both loans are identical in size and structure, but only the member loan qualifies for the Articles 60–61 exemption — the non-member loan carries the same DST a non-cooperative lender would owe on an equivalent instrument, illustrating why “the borrower is a member” is the operative fact, not simply “the lender is a cooperative.”

Frequently asked questions #

Is a cooperative exempt from documentary stamp tax on its transactions with members? #

Yes. Articles 60 and 61 of Republic Act No. 9520, the Philippine Cooperative Code of 2008, provide that transactions of members with the cooperative are not subject to any taxes and fees, including documentary stamp tax, on instruments like loan agreements between the cooperative and its own members.

Does this DST exemption also cover the other party when the cooperative transacts with a non-member? #

No. The BIR has clarified that the exemption under RA No. 9520 protects the cooperative and its members on member transactions specifically — it does not exempt a non-member counterparty from documentary stamp tax that would otherwise apply to a transaction with the cooperative, and the DST on that transaction remains the responsibility of whichever party the general DST rules assign it to.

Does a cooperative need to apply for anything to claim this exemption? #

Yes. A duly registered cooperative applies for and secures a Certificate of Tax Exemption/Ruling from the BIR, generally within sixty (60) days from the date its Certificate of Registration is issued, to formally document and rely on its tax-exempt status — including for documentary stamp tax on qualifying member transactions.

Is DST exemption the same as income tax exemption for a cooperative? #

No — they are separate exemptions granted by different provisions of RA No. 9520, though both can apply to the same qualifying cooperative. A cooperative’s income tax exemption on member transactions and its documentary stamp tax exemption on member transactions are assessed independently, and neither one automatically implies the other applies to a given transaction.

Does this exemption apply to a cooperative’s transactions with a bank or another cooperative? #

The member-transaction exemption under Articles 60 and 61 is framed around dealings between the cooperative and its own members — a cooperative’s transactions with an outside bank, supplier, or another cooperative are not automatically covered by this specific member-transaction exemption and are assessed under the general DST rules unless a separate, applicable exemption exists.

Summary #

Articles 60 and 61 of RA No. 9520 exempt a duly registered cooperative’s transactions with its own members — including the loan agreements and deposit instruments those transactions produce — from documentary stamp tax, but the exemption is specifically tied to member status, not to the cooperative’s identity alone. A non-member borrower or counterparty transacting with the cooperative doesn’t inherit the exemption, and a cooperative should hold a current BIR Certificate of Tax Exemption to rely on the rule with confidence. This sits alongside, but separate from, the cooperative’s broader income tax and VAT exemption under the same Code. For that broader exemption package, see Cooperatives: BIR Tax Exemption Under RA No. 9520, and for the general DST filing mechanics that apply once a transaction isn’t exempt, see Documentary Stamp Tax (DST): What It Is and When BIR Form 2000 Applies.