10% Overseas Communication Tax Imposed on PAMURI

April 30, 1990 BIR RULING NO. 066-90 118 039-82 066-90 S i r : This refers to your letter dated January 24, 1990 requesting our immediate response regarding the position paper filed with your Office by PAMURI (Philippine Association of Multinational Companies' Regional Headquarters, Inc.) for exemption, among others of its members from the 10% overseas communication tax imposed under Section 118(a) of the Tax Code, as amended. In reply, please be informed that Art. 65, Chapter III, Book III of Executive Order No. 226 otherwise known as the Omnibus Investment Code of 1987 which PAMURI cited in support of its contention provides that regional or area headquarters of multinational companies shall be free from local licenses, fees, dues, imposts or any other local taxes or burdens. Clearly, said exception does not include the 10% overseas communication tax which is a national internal revenue tax. Moreover, Section 118(b) of the Tax Code explicitly limits the exemption from the payment of the 10% overseas communication tax to only four (4) entities, namely: (i) Government; (ii) Diplomatic services; (iii) International organization; and (iv) News services It appearing that multinational companies including their regional headquarters (RHQ's) established in the Philippines are not among those enumerated, it is regretted that the aforesaid request of PAMURI cannot be granted for lack of legal basis. (BIR Ruling No. 159-82) cdt Very truly yours, (SGD.) JOSE U. ONG Commissioner