BIR Ruling [DA-395-99]

July 9, 1999 BIR RULING [DA-395-99] Mr. Anderson V. Monroy 7 Chico St., Project 2 Quezon City S i r : This refers to your letter dated December 14, 1998 requesting for an exemption from the final withholding tax of your dollar savings and time deposit accounts. Documentary evidence presented states that you are a Merchant Marine Officer and was issued a Seafarer's Registration Certificate No. 0090314 by the Philippine Overseas Employment Administration (POEA) on December 8, 1993; that you have dollar savings and time deposit accounts; and that you are of the opinion that your interest earnings from said deposit accounts are exempted from the final withholding tax of 7.5%. In reply, please be informed that the final income tax of 7.5% prescribed under Section (24)(B)(1) of the Tax Code of 1997 is imposed on the interest income received by an individual taxpayer from a depository bank under the expanded foreign currency deposit system, to the exclusion of non-resident individuals. Since you are a non-resident individual/seaman as evidenced by the photocopies of your Seafarer's Registration Certificate issued by the POEA and your Seaman Book issued by the Maritime Industry Authority (MARINA), the interest income of your foreign current deposit account is therefore, exempt from the 7.5% final income tax imposed under said Sec. (24)(B)(1) of the Tax Code of 1997, as implemented by Revenue Regulations No. 10-98 dated August 25, 1998. However, if your bank account is jointly under your name and your spouse or dependent who is a resident of the Philippines, then 50% of the interest income from such bank deposit shall be treated as exempt while the other 50% shall be subject to a final withholding tax of 7.5%. (BIR Ruling No. 166-98 dated November 23, 1998) ACDTcE This ruling is issued on the basis of the foregoing representations. 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 and Enforcement Group)