Application for Relief from Double Taxation on Interest Payments by a United Kingdom Bank

September 20, 1994 BIR RULING NO. 142-94 RP-UK Tax Treaty 000-00 142-94 Mrs. Lily A. Doblar Hillside Subdivision Mansilingan, Bacolod City M a d a m : This refers to your application for relief from double taxation on interest payments by a United Kingdom bank, a British company, to the Estate of the late Juan Isasi Echevarri, and payable to the beneficiary, Jose Marie Isasi, a Filipino, residing at Palayog, Hinigaran, Negros Occidental. In reply, please be informed that under Article II of the RP-United Kingdom Tax Treaty which provides thus, "1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it arises and according to the law of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 15% of the gross amount of the interest." . . . the interest on deposit credited to the account of the United Kingdom Administrators of the Estate of Juan Isasi Echevarri in the United Kingdom Bank, and distributed to the beneficiaries residing in the Philippines are subject to 15% income tax based on the gross amount thereof. This serves as your authority to claim on behalf of Jose Marie Isasi for the application of the Tax Treaty rate of 15% on the gross interest earnings of deposits credited by the U.K. bank to the Administrators of the subject estate of which he is one of the beneficiaries in the Philippines. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue