BIR Ruling No. 087-83

May 17, 1983 BIR RULING NO. 087-83 Gentlemen : This refers to your letter dated November 26, 1982 requesting a ruling that dividends to be paid by your client, Rikio Southeast Asia, Inc. (RSA) in favor of Rikio Company, Ltd., a non-resident corporation domiciled in Japan, is subject to only 10% withholding tax pursuant to Art. 10 (2)(a) of the RP-Japan Tax Treaty. It is represented that your client is a domestic corporation with principal office at Maga, Cebu; that it is engaged in the business of manufacturing and exporting rubber footwear; that as of October 31, 1982, 29% of 200,000 shares of stock issued by your client is owned by Rikio Company, Ltd. In reply, please be informed that under the Article 10 (2) (a) of the RP-Japan Tax Treaty, the tax on dividends is 10% of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 25% either of the voting shares of the company paying the dividends or of the total shares issued by that company during the period of six months immediately preceding the date of payment of the dividends. Since Rikio Company, Ltd. holds more than 25% of the shares of stocks issued by your client, the dividends payable to Rikio Company, Ltd. by your client are subject to 10% withholding tax on the gross amount of the said dividends. Very truly yours, (SGD.) ROMULO M. VILLA Acting Commissioner Bureau of Internal Revenue