BIR Ruling

December 29, 1978 Telefunken Semiconductors (Phils.), Inc. P. O. Box 668 Greenhills Metro Manila Attention: Mr . Manfred H . Osaka General Manager Gentlemen : This refers to your letter dated December 7, 1978 requesting a certification from this Office that the dividends which Telefunken Semiconductors (Phils.), Inc. will remit to ASG-Telefunken International AG, Beethovenstrasse 20, CB-8002 Zurich, Switzerland is subject to withholding tax at the rate of 15% instead of 35%. It appears that Telefunken Semiconductors (Phils.), Inc., 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. acd 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 Telefunken Semiconductors (Phils.), Inc. to the abovenamed non-resident foreign corporation are subject to withholding tax at the rate of 15% only pursuant to Sec. 24(b)(iii) of the Tax Code of 1977. (See also B.I.R. Ruling dated May 31, 1977) aisa dc Very truly yours, (SGD.) EFREN I. PLANA Acting Commissioner of Internal Revenue