BIR Ruling

May 14, 1973 The Northwest Airlines, Inc. 1020 Roxas Boulevard Manila Attention: Mr . Alfonso F . Santos Accountant Gentlemen : In reply to your letter dated April 16, 1973, I regret to have to inform you that a foreign trust cannot qualify for tax-exemption under Republic Act No. 4917 as amplified by Revenue Regulations No. 1-68. (See also par. 2605.011, p. 30.027; pars. 2605.67 & 2605.70, pp. 30.042 & 30.044, Vol. 3, CCH (1970); Sec. 1.401-1(a) (3) (i), Regulations) Such being the case, the retirement benefits paid by you to Mr. Bienvenido N. Jaque, Sr., a retired resident employee, and to all other resident employees retiring under a retirement fund which, as represented, is a non-contributory plan organized, created and maintained in your General Office at Minneapolis, St. Paul, U.S.A. are subject to Philippine income tax and consequently to the withholding tax prescribed by Revenue Regulations No. V-8-A as amended by Revenue Regulations No. 70. aisadc Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue