Standard Chartered Bank

December 28, 2009 BIR RULING [DA-(FIT-026) 861-09] 32 (B) (7) (a); DA289-08 Standard Chartered Bank Standard Chartered Bank Building 6788 Ayala Avenue Makati City Attention: Ms. Kathrina Lapus Sebastian Relationship Manager Gentlemen : This refers to your letter dated March 16, 2009 requesting for re-validation of BIR Ruling No. DA289-08 dated May 15, 2008 , wherein this Office held that ". . . any income received by Monetary Authority of Singapore from its investment in the Philippines, such as interest on loans, interest on deposits, interest on bonds, dividends, and capital gains on sale of shares of stock, bonds and other domestic securities, are exempt from Philippine income tax and consequently from withholding tax. aAHISE Accordingly, income derived by MAS from the sale of its investment in the Philippines is not subject to Philippine income tax and consequently to withholding tax." In reply thereto, please be informed that Section 32 (B) (7) (a) of the Tax Code of 1997 provides that "(a) Income Derived by Foreign Government. Income derived from investments in the Philippines in loans, stocks, bonds or other domestic securities, or from interest on deposits in banks in the Philippines by (i) foreign governments, (ii) financing institutions owned, controlled, or enjoying refinancing from foreign governments, and (iii) international or regional financial institutions established by foreign governments." shall not be included in gross income and shall be exempt from tax. Inasmuch as it is represented that the Monetary Authority of Singapore is a financial institution owned, controlled and financed by the State of Singapore as contemplated in Section 32 (B) (7) (a) (ii) of the Tax Code of 1997, income derived from its investments in the Philippines is not subject to income tax and consequently to withholding tax. SUCH BEING THE CASE, this Office holds that BIR Ruling No. DA289-08 dated May 15, 2008 issued in favor of the Monetary Authority of Singapore is still valid and subsisting. 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, (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal & Inspection Group