BIR Ruling [DA-193-99]

March 29, 1999 BIR RULING [DA-193-99] Mr. Alfonso V. Medina 23 Mayumi Street Quezon City S i r : This refers to your letter dated August 27, 1998 jointly signed by your wife Belen T . Medina requesting exemption from the final income tax of your interest income derived from foreign currency deposits with your bank. In reply, please be informed under Section 24 (B)(1) of the Tax Code of 1997, a final income tax of 7.5% is imposed on the interest income received by an individual taxpayer from a depository bank under the expanded foreign currency deposit system. The law however, specifically excludes the interest income received by nonresident individual from a depository bank under the expanded foreign currency deposit systems. Accordingly, since you and your wife are both nonresident citizens as evidenced by the attached xerox copies of your respective visas, your interest income from foreign currency deposit account with your bank is exempt from the 7.5% final income tax imposed under Section 24(B)(1) of the Tax Code of 1997. This will, therefore, serve as authority for the depository bank to forego the withholding of the 7.5% final income tax on your interest income from foreign currency deposit account. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue