BIR Ruling [DA-351-99]

June 16, 1999 BIR RULING [DA-351-99] Philam Bank Philam Building cor. Dela Rosa & C. Palanca, Jr. Street Legaspi Village Makati City Attention: Mr . Joselito Ariel A . Halili Assistant Vice President Trust Banking Division Gentlemen : This refers to your letter dated July 6, 1998 requesting on behalf of Food Industries, Inc. Employees' Retirement Plan for reconsideration of the pertinent portion of the tax exemption certificate previously issued by the BIR dated May 29, 1990, which reads as follows: "xxx xxx xxx "2. The income of the Trust Fund from its investments are exempt from income tax [Sec. 53(b), Tax Code]. However, in view of the amend of Section 21(c)(1) in relation to Section 50(a) of the Tax Code by Executive Order No. 37 which took effect on August 1, 1986, the Food Industries, Inc. Employees' Retirement Plan is subject to the 20% final tax on interest and/or yield on deposit substitute instruments; and interest on its savings and time deposits paid or accrued beginning August 1, 1986; and "xxx xxx xxx In reply, please be informed that since the Food Industries, Inc. Employees Retirement Plan has been determined by the BIR as a reasonable private benefit plan within the contemplation of then Section 28(b)(7)(A) of the Tax Code, as amended [now Section 32(B)(6)(a) of the Tax Code of 1997], and as a tax-exempt employees' trust under Section 60(B) of the Tax Code of 1997, it remains exempt from income tax on income from its investments, provided that in its investment activities, no part of the corpus or income of the fund shall be used for or directed to purposes other than for the exclusive benefit of the member-employees or their beneficiaries. Moreover, the Food Industries, Inc. Employees' Retirement Plan is no longer subject to the 20% final tax on interest and/or yield on deposit substitute instruments and on interest on its currency bank deposits. (CIR vs. GCL Retirement Plan, GR No. 95022 dated March 24, 1992) 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.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)