BIR Ruling

October 26, 1977 Messrs. Sycip, Gorres, Velayo & Co. P.O. Box 589, Manila Attention: Mr . M . Gutierrez Tax Division Gentlemen : This refers to your letter dated August 3, 1976, a certification from this Office that the dividends which your client, Eli Lilly (Philippines) Inc., will remit to Eli Lilly Geneva is subject to withholding tax at the rate of 15% instead of 35%. It appears that your client is a domestic corporation while the recipient corporation is organized under the Laws of Switzerland and is not engaged in trade or business in the Philippines. In reply, I have the honor to inform you that it appearing that Switzerland, the domicile of the recipient company, does not impose any income tax on dividends received by corporations therein from sources outside said country, the dividends to be remitted by your client to the abovenamed non-resident foreign corporation are subject to withholding tax at the rate of 15% only. (see also B.I.R. Ruling dated May 31, 1977) Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-D2567-D1025-A-2