BIR Ruling No. 061-82

March 5, 1982 BIR RULING NO. 061-82 053-e 000-00 061-82 Philippine Export and Foreign Loan Guarantee Corporation 5th Floor, Executive Building Center Buendia Ave. Ext. cor. Makati Avenue Makati, Metro Manila Attention: Ms . Zenaida B . Dimalaluan Financial Management Officer Gentlemen : This refers to your letter dated December 7, 1981 requesting a ruling which will in effect authorize depository banks to forego withholding of the corresponding final income tax on the interest earnings of your deposits and investments therein. cdtech You have represented that you are a wholly-owned Government corporation previously enjoying tax exemption privileges under Presidential Decree No. 1080; that since your said tax exemption privileges were abrogated by Presidential Decree No. 1177, all your tax liabilities, including income taxes, are now being settled thru the Payment Compliance Certificate in accordance with the Joint Budget Circular No. 289 and Finance Circular No. 2-78 dated May 9, 1978; that in view of the implementation of Presidential Decree No. 1739, your interest income derived from your deposits, money market placements and investments in government securities are now subjected to a final withholding tax by the different banks concerned effective September 17, 1980. In reply, please be informed that under the aforesaid joint circular, you are entitled to either a tax subsidy or payments constituting equity contributions in which case, you shall not be required to pay cash; that the revenue collecting agency shall instead issue a "payment compliance certificate" indicating the nature of the assessment and amount due; and that the subsidy or equity contributions shall be effected through journal vouchers or their equivalent. Such being the case, if the income taxes are withheld from the interest earnings of your deposits and investments in banks, that is tantamount to requiring you to pay cash . (BIR Ruling No. 53-e-002-80-124-81 dated July 24, 1981) Accordingly, your request, being meritorious, is hereby granted. cd This serves as authority of the depository banks to forego withholding of the 15% tax on savings deposit and 20% in case of time deposit and yield from deposit substitutes maintained by you with them. Very truly yours, RUBEN B. ANCHETA Acting Commissioner