Applicable Withholding Tax Rate on Film Rental Payments to US Film Suppliers

February 21, 1985 BIR RULING NO. 025-85 37 a 128-84 025-85 Gentlemen : This refers to your letter dated December 6, 1984 requesting information regarding the applicable withholding tax rate on film rental payments to US film suppliers. In reply, please be informed that under the RP-US Tax Treaty, the tax on royalties is 25% [Article 13(2)(b)] but subject to most-favored-nation treatment under Article 13 (2)(b)(iii) of the same treaty. Considering that under the RP-Sweden Tax Treaty (Article XIII paragraph 1) and RP-Denmark Tax Treaty (Article IX par. 1), Swedish and Danish residents are subject to 10% tax on rentals or other amounts paid as a consideration for the use, or the right to use, motion picture film, film or tapes for radio or television broadcasting, the same reduced rate of 10% is, therefore, also extended to American residents. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner