BIR Ruling

May 16, 1969 The Philippine National Bank International Department Manila, Philippines Gentlemen : This refers to your letter (INT-rem INT) dated April 2, 1969 on behalf of the U. N. Development Programme which is exempt from the payment of direct taxes under Article II of the Convention on the Privileges and Immunities of the United Nations. You request opinion on whether or not the U. N. agency is exempt from the payment of documentary and science stamp taxes on checks issued to it by the Philippine National Bank. In reply, I have the honor to inform you that while the United Nations Development Programme is exempt from the payment of all direct taxes, it is not, however, exempt from the payment of indirect taxes or taxes shifted to it by those directly liable thereto. The payment of documentary and science stamp taxes on PNB Check No. 143181 covering the amount of P304,204.23 is primarily the direct liability of the Philippine National Bank pursuant to Section 210 of the National Internal Revenue Code. The Philippine National Bank, however, shifted the tax burden to the U. N. Development Programme by making the latter pay indirectly the documentary and science stamp taxes on said check. cdll Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue