BIR Ruling

September 29, 1977 United Artists of Philippines, Inc. Third Floor, P.P.L. Bldg. U.N. Avenue, Manila Attention: H . M . Dimaculangan Chief Accountant Gentlemen : This refers to your letter dated August 22, 1977 requesting certification that your branch profit remittance to your Head Office in New York, U.S.A., approved as per Central Bank letter dated May 4, 1977, is subject to 15% remittance tax, pursuant to Presidential Decree No. 1158, which took effect on June 3, 1977. It appears that said profits were earned by you in 1976 but the same has not as yet been remitted abroad. In reply, I have the honor to inform you that Section 24(b) (2) of the Tax Code, as amended by Presidential Decree No. 1158 provides that "Any profit remitted abroad by a branch office to its mother company shall be subject to tax of fifteen percent . . ."(Emphasis ours). In other words, there should be remittance of profits in order that said remittance tax may accrue. Such being the case, and since the profits will be remitted abroad at the time when P. D. 1158 had taken effect, said profits are subject to the 15% remittance tax prescribed by said Decree. Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-D2567-D1025-A-2