Request for Exemption from 15% Final Withholding Tax of U.S. Disbursing Officer's Interest Earnings on Deposit Account

April 25, 1985 BIR RULING NO. 062-85 21 (d) 000-00 062-85 Gentlemen : This refers to your letter dated March 21, 1985 relative to your Diplomatic Note No. 708, requesting that the interest earnings on the deposit account of the U.S. Disbursing Officer be exempt from the 15% final withholding tax imposed by Section 21(d) of the Tax Code as amended by P.D. No. 1959 and implemented by Revenue Regulations No. 17-84. It is represented that as part of the United States Embassy's Administrative operations, the Disbursing Officer, Mr. Richard Wood keeps a deposit account No. 5/513407/027 with the Citibank. cdta In reply, please be informed that under Article 34 of the Vienna Convention adopted on April 18, 1961 by the United Nations on Diplomatic Intercourse and Immunities, diplomatic envoys are exempt from all dues and taxes, whether personal or real, national, regional or municipal, except the following: xxx xxx xxx "(d) dues and taxes on private income , having its sources in the receiving state and capital taxes on investments in commercial ventures in the receiving state." Such being the case, since the interest income on the deposit account held by the disbursing officer is not his personal income, but part of the United States Embassy's administrative operations, the said interest income is not subject to income tax, and consequently, not subject to the final withholding tax of 15% imposed by Section 21(d) of the Tax Code, as amended by P.D. No. 1959. cdti Very truly yours, (SGD.) TOMAS C. TOLEDO Acting Commissioner