Requests of the United Nations Secretariat Involving its Investments in Shares of Stocks with PLDT

March 3, 1986 BIR RULING NO. 020-86 29 (c) (6) 000-00 020-86 S i r : This refers to your letter dated September 1, 1985 and January 27, 1986 relative to the following requests of the United Nations Secretariat, namely: (1) the refund of taxes withheld in 1982 and 1983 from dividends/interests earned on investments in shares of stock of the Philippine Long Distance Telephone Company (PLDT) by the United Nations Joint Staff Pension Fund in the amount of P768,750.00; and (2) assistance in the repatriation of US $1,099,518, the equivalent of P15,415,250.00 representing the proceeds from the sale of its PLDT shares of stock. cd In reply, please be informed that under Section 7 of the Convention on the Privileges and Immunities of the United Nations (UN), pertinent portion of which provides as follows: "Sec. 7. The United Nations, its assets, income and other property shall be: (a) Exempt from all direct taxes; it is understood however, that the United Nations will not claim exemption from taxes which are, in fact, no more than charges for public utility services. xxx xxx xxx the UN shall be exempt from internal revenue taxes for which it is directly liable . In the instant case, as the recipient of the dividends/interests and proceeds from the sale of its PLDT shares of stock, UN is directly liable for the tax; however, since the Convention provides that the UN, its assets, income and other property shall be exempt from all direct taxes, UN is, therefore, exempt from paying income tax on the aforesaid dividends/interests and proceeds from the sale of its PLDT shares of stock. For the foregoing reasons, the above request of the UN Secretariat for the refund of the taxes withheld in 1982 and 1983 from earnings on investments in PLDT shares by the UN Joint Staff Pension Fund, is hereby granted. Moreover, this Office will interpose no objection to the repatriation of the proceeds from the sale of the UN's PLDT shares of stock. The herein claim for refund has been referred for verification after which the corresponding treasury warrant covering the refundable amount will be prepared and, thereafter, transmitted to that Ministry. cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner