Tax Imposed on Interest Payments Made by a Resident Borrower on Foreign Currency Loans
BIR Ruling No. 126-87 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • May 13, 1987
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May 13, 1987 BIR RULING NO. 126-87 25-a-4 000-00 126-87 Gentlemen : In reply to your letter dated October 13, 1986, I have the honor to inform you that your opinion to the effect that interest payments made by a resident borrower on foreign currency loans granted to it by an offshore banking unit (OBU) at the time the OBU was licensed to do business in the Philippines, remain subject to the ten percent (10%) final withholding tax even when the OBU has ceased to do business in the Philippines pursuant to Section 25(a)(4) of the Tax Code, as amended by Executive Order No. 37, is hereby confirmed. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner
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