BIR Ruling [DA-048-99]

January 25, 1999 BIR RULING [DA-048-99] Far East Bank and Trust Company Far East Bank Center Sen. Gil J. Puyat Avenue Makati City Attention: Atty . Mildred Maranan-Garcia Administrative Manager Gentlemen : This refers to your letter dated November 13, 1998 requesting on behalf of Caltex Philippines, Inc. for a ruling on the tax consequence of the transfer of its funds to its new Trustee, CPI Retirement Fund, Inc. aisadc It is represented that on May 12, 1986, the Board of Trustees of the New Retirement Plan of Caltex (Philippines), Inc. (Board of Trustees) entered into an Investment Advisory Agreement With Far East Bank and Trust Company (Investment Advisor); that the Board of Trustees created and established with the Investment Advisor an Investment Advisory Account consisting of the amount of P121,072,995.04; that the Investment Advisor, who will hold the assets of the Account in custody, will review them periodically, and make such recommendations to the Board of Trustees as to the retention or disposition of securities, the investment and reinvestment of cash, and other investment changes in the Account as it shall deem advisable, having in mind the latter's objectives as it shall from time to time indicate to the former in writing and will carry out such instructions of the Board of Trustees with respect to the Account; that on March 3, 1998, a Trust Agreement was entered into by and between Caltex Philippines, Inc. (Trustor) and CPI Retirement Fund, Inc. (Trustee) whereby the latter has been organized as a non-stock corporation exclusively for the purpose of receiving the Trustor's contributions to the Retirement Fund of its employees, managing the Fund and making payments and distributions to the beneficiaries of the Fund in accordance with the New Retirement Plan of the Trustor; and that the Trustor and the Trustee now desire to set forth herein their understanding in respect to the management of the Fund to the end that no part of the corpus or income of the Fund shall be used or diverted to purposes other than for the exclusive benefit of the beneficiaries thereof. In reply please be informed that the change of trustee for the purpose of consolidating the administration of the Caltex (Philippines), Inc. Retirement Plan is not taxable, and therefore, all properties both real and personal, monies, shares of stock, and others in the name of the former Trustee, the Board of Trustees of the New Retirement Plan of Caltex (Philippines), Inc. may be transferred to the new designated Trustee, CPI Retirement Fund, Inc. (BIR Ruling No. 209-91 dated October 18, 1991) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cdta Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)