Withholding Tax Rate Applicable to Dividends to be Remitted to BHP Trading Pte. Ltd. and William Farrands

January 19, 1984 BIR RULING NO. 010-84 24-b-000-00-010-84 Gentlemen : This refers to your letter dated October 13, 1983 requesting a certification from this Office as to the withholding tax rate applicable to dividends to be remitted to BHP Trading Pte. Ltd., Singapore and Mr. William Farrands of Australia. It is represented that the foreign equity investments in your company of BHP Trading Pte. Ltd., Singapore is P44,800.00 representing 448 shares and P100.00 representing one (1) share of Mr. William Farrands, Melbourne, Australia; that the gross dividends declared for FY ending June 30, 1982 for the above investments were P26,437.00 and P59.00, respectively. In reply, please be informed that with respect to the dividends issued to BHP Trading Pte. Ltd., of Singapore, Article 10(2)(a) of the RP-Singapore Tax Treaty is applicable. It provides that dividends derived from a company which is a resident of the Philippines by a resident of Singapore who is the beneficial owner thereof, may be taxed in the Philippines at 15% of the gross amount of the dividends if the recipient company owns at least 15% of the outstanding shares of the voting stock of the paying company. Considering that BHP Trading Pte. Ltd., owns more than 15% of the outstanding shares of the voting stock of BHP Philippines Trading Pte. Ltd., the dividends are subject to 15% withholding tax. With respect to the dividends issued to Mr. William Farrands, Article 10(2)(b) of the RP-Australia Tax Treaty is applicable. It provides that the dividends derived from a company which is a resident of the Philippines by a resident of Australia who is beneficially entitled to it may be taxed in the Philippines at 25% of the gross amount of the dividends. Since the recipient of the dividends is an Australian resident individual, the dividends are subject to 25% withholding tax. In view thereof, this Office hereby certifies that the dividends to be remitted to BHP Trading Pte. Ltd., Singapore in the amount of P26,437.00 is subject to 15% withholding tax; and the dividends to be remitted to Mr. William Farrands, Melbourne, Australia in the amount of P59.00 is subject to 25% withholding tax. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner