The after-tax surplus of a credit cooperative shall first be used to make up the accumulated losses; the remainder shall then be appropriated or distributed in accordance with the following order of priorities:
1. 40% or more thereof as legal surplus reserves;
2. Dividends on membership shares, provided that no dividends may be
3. Declared if no surplus exists during the current year;
4. 5% of the remainder, after deducting what described in the preceding sub-paragraphs (1) and (2), as welfare fund; remunerations for directors and supervisors, provided that they shall not exceed 5% of the legal surplus reserves of the current year; and
5. Distributions to members on their transactions with the cooperative.

Where the amount of reserves appropriated under the preceding Article exceeds ten times the aggregate amount of the share capital, and the ratio of equity capital to risk capital has complied with what prescribed in Article 44 of the Banking Law, the credit cooperative may at its own discretion determine the amount to be appropriated as reserves of the year, provided however that, the percentage of surplus so appropriated shall be not less than 15%.
In addition to legal surplus reserves, a credit cooperative may, by articles of cooperative or a resolution of the general meeting of members, determine to establish special surplus reserves. Where it is deemed appropriate and necessary, the Central Competent Authority may also order that such reserves be established.

The following funds shall be accumulated as capital reserves:
1. Capital gains from disposal of fixed assets;
2. Donations received;
3. Excess of appreciation over depreciation from revaluation of fixed assets; and
4. Assets received less liabilities assumed from a credit cooperative ceased to exist after a voluntary amalgamation and payments made to the cooperative members.