BIR Ruling [DA-584-06]

September 27, 2006 BIR RULING [DA-584-06] Romulo Mabanta Buenaventura Sayoc & De Los Angeles 30th Floor, Citibank Tower 8741 Paseo de Roxas Makati City Attention: Atty. Jose C. Salvosa Gentlemen : This refers to your letter dated September 7, 2006 stating that pursuant to the Sale and Purchase Agreement executed on January 18, 2006, CGU International Insurance PLC (CGU) sold its general (non-life) insurance business in the Philippines to Mitsui Sumitomo Co., Ltd. (MSI); that MSI then nominated Aviva General Insurance Pte. Ltd. (AVIVA), which is a wholly-owned subsidiary of MSI, to be the purchaser of the general (non-life) insurance business of CGU in the Philippines; that at the time of the sale and purchase, CGU had established and was the Trustor of the CGU International Insurance PLC Provident Fund; that the BIR had in fact already issued a certificate of qualification on December 5, 2001 that the said Provident Fund is a reasonable private benefit plan under Section 32(B)(6)(a) of the Tax Code of 1997; that on December 2, 2005, as a result of the sale and purchase, CGU and AVIVA executed a Provident Fund Transfer Agreement whereby CGU assigned, transferred, conveyed and ceded in favor of AVIVA all of its rights, title and interest in the Provident Fund; that under the terms of the Agreement, the parties agreed that AVIVA would be substituting CGU as its successor-in-interest and obligor and that AVIVA would fulfill all of the legal duties of CGU in the Provident Fund; that it was further agreed that the Plan Rules would be adopted by AVIVA for the benefit of the employees; that by virtue of the transfer, all of the policyholders under the Provident Fund continue to enjoy the same protection and benefits provided therein and the rules and policies of the Provident Fund remain the same; and that CGU International Insurance PLC Provident Fund is now considered to be and will be referred to as the Aviva General Insurance Pte. Ltd. Provident Fund but subject to the same rules of the former. In connection therewith, you now request confirmation that the foregoing steps which AVIVA intends to take as regards the retirement plan of CGU will not affect the tax exemption and qualification of the Plan under the Tax Code of 1997. In reply thereto, please be informed that foregoing steps which AVIVA intends to take as a result of the sale and purchase agreement is not prejudicial to the employee members and therefore will not affect the qualification of the Aviva General Insurance Pte. Ltd. Provident Fund under Section 32(B)(6)(a) of the Tax Code of 1997 and the fund created to implement the provisions of the Plan and the retirement pay to qualified retirees remain exempt pursuant to said law. DaScCH Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service