Standard Chartered Bank Ltd. (SCBL) Payable to New York Office by PDCP Subject to 25% Withholding Tax

February 24, 1982 BIR RULING NO. 044-82 24-b 70-81 044-82 Messrs. Sycip, Gorres, Velayo and Company P.O. Box 589, Manila Attention: Atty . M . Gutierrez Tax Division Gentlemen : This refers to your letter dated September 12, 1980 requesting confirmation of your opinion to the effect that cash dividends due to your client the Standard Chartered Bank Ltd. (SCBL) payable to its New York Office by the Private Development Corporation of the Philippines (PDCP) is subject to 25% withholding tax. It is represented that SCBL is a foreign corporation not doing business in the Philippines domiciled in the United Kingdom; that it has other foreign branches throughout the world which are all not doing business in the Philippines; that one of its branches, SCBL New York has an investment in PDCP in the form of a 1.46% equity participation. cdta In reply thereto, I have the honor to inform you that Section 1(a) and (b), Article 9 of the RP-UK Treaty provides as follows: "Article 9 Dividends" "1. Dividends derived from a company which is a resident of the Philippines by a resident of the United Kingdom may be taxed in the United Kingdom. Such dividends may also be taxed in the Philippines but where such dividends are beneficially owned by a resident of the United Kingdom the tax so charged shall not exceed: (a) 15% of the gross amount of the dividends if the beneficial owner is a company which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividends; and (b) in all other cases, 25% of the gross amount of the dividends." In view thereof, and considering that the equity of SCBL in PDCP is only 1.46%, the tax imposable on the cash dividends received by the SCBL from PDCP are subject only to 25% withholding tax on the gross amount of the said cash dividends. Very truly yours, RUBEN B. ANCHETA Acting Commissioner