BIR Ruling

May 14, 1973 The American President Lines P. O. Box 788 Manila Attention: Mr . F . K . Lee Managing Director (Phil . ) Gentlemen : This refers to your letter dated April 6, 1973 requesting information as to the tax status of the American President Lines Employees' Provident Plan. cdi It is represented that the American President Lines has established a Provident Plan for all locally paid employees in its foreign branches effective January 1, 1963; that it has recently agreed in principle to grant retirement benefits under the said Plan to its Manila Office personnel; and that the entire retirement fund is being invested and administered by a Pension Committee in San Francisco, U.S.A. In reply thereto, I have the honor to inform you that a qualified employees' trust must be organized or created in the Philippines and maintained at all times as a domestic trust. (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). In view thereof, this Office is of the opinion as it hereby holds that being a foreign trust, the American President Lines Employees' Provident Plan cannot qualify for tax-exemption under Republic Act No. 4917 as amplified by Revenue Regulations No. 1-68. Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue