Deductibility of the 15% Withholding Tax

June 23, 1980 BIR RULING NO. 082-80 China Banking Corporation Dasmarias Cor. Juan Luna Sts. M a n i l a Attention: Mr . Antonio B . Dayrit, Jr . Asst . Vice-President Trust Officer Gentlemen : In reply to your letter dated November 6, 1978, I have the honor to inform you that under Section 1(g) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79 both implementing Presidential Decree No. 1351, income distributed to beneficiaries of estates and trusts as determined under Section 57 of the National Internal Revenue Code is subject to the withholding tax of 15%. In other words, a tax of 15% shall be deducted or withheld by the trustee on the income distributed actually or constructively to beneficiaries of estates and trusts. The obligation of the trustee to deduct and withhold under these Regulations arises at the time an income which is subject to withholding under Section 1 hereof is payable or paid. (Section 10 of Revenue Regulations No. 6-79). Moreover, the expanded withholding tax imposed by P.D. 1351 as implemented by Revenue Regulations Nos. 13-78 and 6-79 is not a final tax but a creditable income tax from certain income payments. Very truly yours, RUBEN B. ANCHETA Acting Commissioner