BIR Ruling

July 22, 1977 Iligan Coconut Industries, Inc. Jardine Davies Building Makati, Rizal Gentlemen : This refers to your letter dated May 25, 1977, requesting that the interest to be remitted by you to the manufacturers Hanover Export Finance Limited (MHEFL) of the United Kingdom on account of the loans you obtained from it be declared exempt from the payment of income tax. In reply, I have the honor to inform you that it appearing from the document submitted by you that the Manufacturers Hanover Export Finance Limited is refinanced by the Export Credits Guarantee Department, an agency of the Government of the United Kingdom, the interest income of the former on account of loans extended to you is exempt from income tax, pursuant to Section 29(b)(7) of the Tax Code which exempts from income tax interest paid on loans obtained from a foreign government or from a financing institution owned, controlled or enjoying refinancing from said foreign government. And as said interest is exempt from income tax, you need comply with the provisions of Section 53(b)(2) of the Tax Code. This will serve as the certification required of you by the Central Bank. Very truly yours, (SGD) EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8