BIR Ruling

December 8, 1976 Tax on Cash Dividends of Domestic Corporations to be Remitted to a Foreign Parent Company This refers to your letter dated November 22, 1976, requesting a certification from this Office that the dividends which your client, Cagayan Packing Corporation will remit to Monterro Corporation is subject to withholding tax at the rate of 15%, instead of 35%. It appears that your client is a domestic corporation; that it is a wholly-owned subsidiary of the aforenamed recipient corporation; and that said corporation is a non-resident foreign corporation domiciled in U.S. In view thereof, and considering that under the present provisions of the U.S. Federal Tax Code, the amount of tax deemed paid on such dividends, and accordingly, to be credited against U.S. tax on said dividends, exceeds the 20% requirement of Presidential Decree No. 369, this Office hereby certifies that the dividends which your client will remit to Monterro Corporation domiciled in U.S. are subject to withholding tax at the rate of 15% only. (B.I.R. Ruling No. 76-004 dated July 19, 1976). cdtech