Application for Relief from Double Taxation in Connection with Professional Fee in the for Conducting a 2-Day Negotiation Skills Workshop

April 19, 1995 BIR RULING NO. 075-95 28 (b) (6) 000-00 075-95 Unilever Philippines (PRC) Inc. 1351 United Nations Avenue Manila Attention: Ms . Annalee C . Paulig Sales Manager Gentlemen : This refers to your applications for relief from double taxation in behalf of Peter Rogen Australia PTY, Ltd., U4 L3, 14 Aquatic Drive, French Forest NSW 2086, Australia, (Rogen Australia) in connection with the latter's (trainers and workbooks) professional fee in the amount of U.S.$7,000. (Aus.$10,145.00) for conducting a 2-day negotiation skills workshop for your company held at the Manila Diamond Hotel in Manila on the 13th and 14th day of January, 1994. LLjur It appears that in January, 1994, your Sales Training Department conducted a Key Account Management Course wherein you hired two consultants namely: Messrs. Geoff Mulray and John Boyle from the firm, Rogen Australia; that in February, 1994, you received their billing; that you faxed Rogen Australia with the information that as a non-resident foreign corporation, their professional fee is subject to 35% withholding tax; but that Rogen Australia "replied saying that they do not pay withholding tax because they do not have an office in the Philippines". In reply, please be informed that under Article 15(1) and (2) of the RP-Australia Tax Treaty, reading: "(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State . If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State. "(2) Notwithstanding the provisions of paragraph (1) remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if "(a) the recipient is present in that other State for a period or periods not exceeding in the aggregate 183 days in the year of income or taxable year, as the case may be, of that other State; and "(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of that other State; and "(c) the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in that other State." the professional fees for conducting a 2-day Negotiation Skills Workshop by the two (2) aforenamed hired consultants regularly employed by Rogen Australia constitute remuneration for dependent personal services and is, therefore, taxable only in Australia. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue