Claims for Refund or Tax Credit of the 20% Final Withholding Tax on Interest Income from Philippine Currency Bank Deposits

September 28, 1994 BIR RULING NO. 147-94 24 (e) (1) 000-00 147-94 Ker & Company, Ltd. Ker Building, Conde de Gamazo Romualdez, Manila Attention: Ms . Jean Pierre C . Zialcita Trustee Gentlemen : This refers to your letter dated March 16, 1994 stating that you have started since April, 1993 the compilation of documents for submission to this Office to comply with the guidelines and procedures contained in the RMO No. 9-93; that so far, you were able to obtain Sworn Statements from banks and other financial institutions where you made your money market placements for the retirement plan of Ker & Co., Ltd. and Ker Insurance Brokers, Inc.; that you have also been furnished copies of the banks' requests for Sworn Statements to the Bangko Sentral ng Pilipinas (BSP) to comply with Requirement No. III, paragraph C, No. (1) of RMO No. 9-93; that inspite of your constant follow-ups with the banks you have not received a single Sworn Statement from the BSP; that another problem you are faced with is that some banks bought the Treasury Bills/Notes from the secondary market, e.g., from one of the then twelve (12) accredited BSP dealers, hence, they cannot request directly for Sworn Statements from them since these banks did not purchase said Treasury Bills/Notes directly from BSP through the primary auction method; and that considering the above-mentioned problem, you find it very difficult, if not impossible, to comply with Requirement No. III, paragraph C, No. (1) of RMO No. 9-93. cdt Based on the foregoing representations, you now request assistance from this Office to protect the interest and benefits of your employees. In reply, please be informed that under Requirement No. III paragraph C, No. (1) of RMO No. 9-93, prescribing the guidelines and procedures in the processing of claims for tax credit or refund of the then 15% (now 20%) final tax withheld from interest income/yield from deposit substitute instruments and interest income from Philippines currency bank deposits of employees' trust/trusteed private employees retirement plans, where the trustee of the BIR-approved employees' trust funds purchased government securities from a financial institution, two (2) sworn statements shall be submitted by the said trustee, namely; (1) from the BSP to the effect that it sold government securities, e.g. Treasury Bills or Treasury Notes, to the named commercial bank(s) on such a date, serial numbers, amount of government securities sold, interest income/yield, and 20% FWT; and (2) from the commercial bank to the effect that it sold such government securities to the tax-exempt employees' or pension trust (as heretofore defined/identified) on a particular date, serial numbers, amount of government securities sold, interest income/yield and 20% FWT. Such being the case, claims for refund or tax credit of the 20% final withholding tax on interest income from Philippine currency bank deposits and or yield/monetary benefit from deposit substitutes, e.g. money market placements, treasury bills, etc., trust fund and similar arrangements of trusteed private retirement plans/employees' trust (as defined in paragraph II of RMO No. 9-93) which were remitted to the Government could not be acted upon by this Office without the required documentation/substantiation requirements prescribed under Requirement No. III, paragraph C, No. (1) of RMO No. 9-93. Accordingly, your request for assistance should be directed to the BSP since it is the proper forum for such request. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue