BIR Ruling

November 18, 1971 Messrs. Sycip, Gorres, Velayo & Co. P. O. Box 589, Manila Gentlemen : This refers to your letter dated November 12, 1971 requesting confirmation of your opinion to the effect that the remittance of dividends to be made by Esso Philippines, Inc. to its stockholder, ESSO Eastern, Inc. at Houston, Texas is not subject to withholding tax at source. cdi It is represented that ESSO Eastern, Inc. is a foreign corporation organized under the laws of the state of Delaware, U.S.A. with head offices at Houston, Texas; and that it is duly licensed and actually engaged in the Philippines through its branch in the sale of aviation and other fuel to local and international airline companies and bunker and other fuel to Philippine and foreign vessels. In reply thereto, I have the honor to inform you that in accordance with Section 53(b)(2) of the Tax Code as implemented by Section 205 of Revenue Regulations No. 2, the withholding of tax at source applies only to foreign corporations not engaged in trade or business within the Philippines. Inasmuch as Esso Eastern, Inc. is engaged in trade or business in the Philippines, no withholding of tax at source is required. In view thereof, this Office is of the opinion and so holds that the remittance of dividends by Esso Philippines, Inc. to Esso Eastern, Inc. at Houston, Texas is not subject to withholding tax under Section 53(b)(2) of the Tax Code. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue