Rate of Income Tax Applicable to Non-Resident Foreign Cinematographic Film Owners, Lessors or Distributors

November 29, 1973 BIR RULING NO. 033-73 Rate of income tax applicable to non-resident foreign cinematographic film owners, lessors or distributors . The withholding tax is in reality an income tax due from non-resident foreign corporations. The withholding provisions of Section 53(b) of the Tax Code is a device without which the Philippine Government may not be able to collect the proper and correct tax on incomes, derived from sources in the Philippines by a ( illegible portion in BIR files ) who are outside the taxing jurisdiction of this country. (Commissioner of Internal Revenue vs. Malayan Insurance Company, Inc. G.R. No. L-21913, November 18, 1967). Since the proper and correct rate of income tax imposable on the income of non-resident cinematographic film owners, lessors or distributors is 15% of their gross income, pursuant to Section 24(b) (1) of the Tax Code, as amended, then correspondingly, the rate of tax to be withheld by persons paying producers' shares or royalties to said corporations is 15% thereof. In other words, the rate of tax prescribed in Section 53(b) (2) does not apply to non-resident cinematographic film owners, lessors or distributors, who are specifically taxed at a lower rate by Section 24(b) (1) of the Tax Code.