BIR Ruling

February 17, 1969 U.S. Tobacco Corporation 23rd & Chicago Sts. Port Area Manila S i r : This refers to the question posed in your letter dated January 15, 1969 as to the proper rate of tax applicable on income earned by non-resident foreign corporations not engaged in trade or business in the Philippines for the first and second quarters of 1968. In reply, I have the honor to inform you that the tax due on income of non-resident foreign corporations not engaged in trade or business in the Philippines becomes due from the time the income is earned or accrued although the payment thereof, by operation of law, is required as of different date. Accordingly, and inasmuch as the new rate of tax prescribed by Republic Act No. 5431 took effect on July 1, 1968, the proper rate applicable on the income earned by P. Lorillard Company during the first and second quarters of 1968 should be at the old rate, that is 30%. You are, therefore, requested to effect settlement of the tax due and withheld by you on the income of P. Lorillard Company for the first and second quarters of 1968 in accordance with the terms contained in our letter to you dated November 20, 1968. casia Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue