BIR Ruling No. 052-65

May 20, 1965 BIR RULING NO. 052-65 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants 490 San Luis, Manila Attention : Mr . A . S . Monzon Gentlemen : Reference is made to your letter dated September 26, 1964 requesting a ruling on the question of whether or not interests payable by the Philippine Long Distance Telephone Company to the Export Credits Insurance Corporation on loans to be extended by the latter to the former is exempt from Philippine income tax. It is contended that such interests are exempt from Philippine income tax under Section 29(b)(7)(A) of the Tax Code. In reply thereto, I have the honor to inform you as follows.: Section 29(b)(7)(A) of the Tax Code exempts from income tax "income of foreign governments received from their investments in the Philippines in stocks, bonds, or other domestic securities, or from interest on their deposits in banks in the Philippines". It is the opinion of this Office that the Export Credits Insurance Corporation is not a foreign government within the contemplation of the aforequoted provision of law. The charter of said corporation clearly shows that it is purely a government owned or controlled corporation performing purely private functions similar to our government owned or controlled corporations like the Government Service Insurance System, Agricultural Credit Administration, etc. It is therefore, the opinion of this Office as it hereby holds that the interests payable by the Philippine Long Distance Telephone Company to the Export Credits Insurance Corporation on loans to be extended by latter to the former are subject to Philippine income tax. cdll Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue