BIR Ruling

January 13, 1976 Embassy of the Federal Republic of Germany 1414 Roxas Boulevard, L & S Bldg. No. 1 Manila Attention: Mr . Hans Funke Economic Counsellor Gentlemen : This refers to your letter dated July 15, 1975 requesting a ruling as to the exemption from taxation of the income derived from investment in the Philippines by way of loan extended to several Philippine companies by the Deutsche Gezellschaft fuer wirtschaftliche Zusammerarbeit or the German Development Company. cdt In reply thereto, I have the honor to inform you that under Section 29(b) 7(a) of the Tax Code, as amended by Presidential Decree No. 69, incomes of foreign governments received from their investments in the Philippines in loan stock, bonds, or other domestic securities or from interest on their deposits in banks in the Philippines are exempt from the income tax. The same section also extends the exemption to financing institutions owned, controlled, or enjoying refinancing from said government. Accordingly, as the German Development Company is a German financing institution, totally owned and controlled "by the Government of the Federal Republic of Germany, the abovementioned income derived by said institution is exempt from Philippine income taxation. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."