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Questions and Answers
According to RA 9520, what is the limit for an external auditor to undertake the external audit of a cooperative?
According to RA 9520, what is the limit for an external auditor to undertake the external audit of a cooperative?
What happens if an auditor exceeds the 5-year limit for auditing a cooperative?
What happens if an auditor exceeds the 5-year limit for auditing a cooperative?
What are the remedies for a member whose request to examine cooperative records was refused?
What are the remedies for a member whose request to examine cooperative records was refused?
What is the rule regarding the tax exemption of cooperatives?
What is the rule regarding the tax exemption of cooperatives?
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What is the process for voluntary termination of membership in a cooperative?
What is the process for voluntary termination of membership in a cooperative?
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What happens to a member's share capital contribution upon termination of membership?
What happens to a member's share capital contribution upon termination of membership?
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What is the role of the Appeal and Grievance Committee?
What is the role of the Appeal and Grievance Committee?
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What happens if an auditor makes a statement in good faith in connection with a matter they are authorized to do pursuant to RA 9520?
What happens if an auditor makes a statement in good faith in connection with a matter they are authorized to do pursuant to RA 9520?
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What is the process for a member to examine cooperative records?
What is the process for a member to examine cooperative records?
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What is the procedure for a member to obtain a copy of excerpts from cooperative records?
What is the procedure for a member to obtain a copy of excerpts from cooperative records?
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Study Notes
Cooperative Financial Obligations
- Upon payment, if assets are greater than liabilities, cooperatives must pay the full rate of:
- Income tax on allocated interest on capital
- Value-added tax
- All other taxes, unless otherwise provided
- Cooperatives are exempt from paying local taxes and taxes on transactions with banks and insurance companies, except for sales or services rendered to non-members, which are subject to applicable percentage taxes
Donations and Tax Deductions
- Donations to charitable, research, and educational institutions, as well as reinvestment in socioeconomic projects within the cooperative's area of operation, may be tax deductible
Privileges of Cooperatives
- Cooperatives can deposit sealed cash boxes or containers, documents, or valuable papers in government offices' safes for free
- Government employee cooperatives can use available space in their agency for free
- Cooperatives providing special services (e.g., cold storage, electricity) can secure a franchise and open membership to qualified persons in their area
- Cooperatives have preferential rights to supply government institutions with agricultural products
- Cooperatives receive preferential treatment in the allocation of fertilizers, seeds, and other agricultural inputs
- Cooperatives receive preferential and equitable treatment in the allocation or control of commercial shipping vessels
- Cooperatives have preferential rights in managing public markets and leasing public market facilities
Non-Liability for Defamations
- Auditors are not liable for defamation based on acts or statements made in good faith while performing their duties
Limitation on Auditors
- External auditors can audit a cooperative for a maximum of 5 consecutive years
- After a 2-year gap, the auditor can be allowed to audit the same client again
- If the auditor exceeds the 5-year limit, they will not be eligible for accreditation renewal for 3 years, and the audited financial statements will not be considered valid compliance
Members' Right to Examine
- Members have the right to examine cooperative records during reasonable hours on business days
- Members can demand a copy of excerpts from the records without charge, except for the cost of production
Remedies for Refusal to Examine
- Members can take action for damages if an officer refuses to allow them to examine the records
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Description
Test your knowledge on taxation rules for cooperatives, including income tax, value-added tax, and other taxes. Explore exemptions related to accumulated reserves and undivided net savings.
