BIR Ruling

August 16, 1973 Messrs. Quasha, Asperilla, Zafra, Tayag & Ancheta Lawyers Don Pablo Bldg., 5177 Amorsolo St. Makati, Rizal D-708 Attention: Atty . Alonzo O . Ancheta Gentlemen : In reply to your letter dated July 9, 1973, I have the honor to inform you that the following transactions: "a) Money placements made by foreign corporation with a domestic bank for relatively short periods of time, say, 30, 60, 90 or 180 days. "b) Acceptances in the nature of foreign suppliers' credit for periods of say, 90, 120 or 180 days, whereby a local bank upon acceptance by the Philippine consignee-importer, releases documents to the importer and under which interest is charged at maturity. There are usually two kinds of goods which are used by the end-user in the process of manufacture, and (2) consumable goods which are sold direct to the public." are not considered "foreign loans" within the contemplation of Presidential Decree No. 131 (not 148), which amended Sections 24(b)(1) and 55(b)(2) of the Tax Code by imposing a tax at the rate of 15%. Such being the case, the interest derived from the foregoing transactions are subject to the regular rate of 35%. acd In this connection, please be further informed that the circular or regulations implementing Presidential Decree No. 131 is still under preparation. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."