BIR Ruling [DA-217-01]

October 25, 2001 BIR RULING [DA-217-01] 28 (B) (5) (b); 045-85 Alba Romeo & Co. Certified Public Accountants 7/F Multinational Bancorporation Centre 6805 Ayala Avenue, Makati City Gentlemen : This refers to your letter dated September 26, 2001 on behalf of your clients, IDS Logistics Inc. (IDS), a domestic corporation organized under the laws of the Philippines, requesting for a confirmation of your opinion that the cash dividends to be declared and pair in favor of its majority stockholder, Li & Fung Distribution (Asia) Ltd., a corporation organized and existing under the laws of the British Virgin Island, is subject to reduced 15% withholding tax pursuant to Section 28(B)(5)(b) of the Tax Code of 1997; and that under the tax laws of the British Virgin Island, dividends received by corporations domiciled therein from foreign sources are not taxable. In reply, please be informed that inasmuch as the government of the British Virgin Island does not impose tax on the dividends to be received by Li & Fung Distribution (Asia) Ltd. from IDS, this Office is of the opinion as it hereby hold that the dividends shall be subject only to the 15% reduced tax pursuant to Section 28(B)(5)(b) of the Tax Code of 1997. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner