15% Withholding Tax-Interest Earnings

August 25, 1981 BIR RULING NO. 163-81 24cc 096-79 163-81 Cultural Center of the Phils. Roxas Boulevard, Manila Attention: Ms . Elizabeth B . Ignacio Comptroller Gentlemen : This refers to your letter dated May 25, 1981 requesting a certification to the effect that being a tax-exempt entity, you are likewise exempt from the final withholding tax on interests on bank deposits and yields from deposit substitutes. In reply, please be informed that under Section 15 of Presidential Decree No. 10, as amended by Presidential Decree No. 1444, which reads: "Section 13. Tax-Exemption . The provisions of Section 1205 of the Tariff and Customs Code, as amended by Presidential Decree No. 34 dated October 28, 1972, Section 190 of the Tax Code, as amended by Presidential Decree No. 69 dated November 24, 1972, and other existing laws notwithstanding, the Center shall be exempt from all forms of taxation whatever including withholding taxes on fees paid to foreign artists passed on to the Center by contract and from duties and all other imposts on any equipment, articles, goods or services that it may import from abroad, which may be reasonably necessary for use in or part of its operations. This exemption shall not include income tax exemption for operating profit-making business ventures such as the hotel." you are exempt from the payment of tax on income other then those derived from the operation of the Philippine Plaza Hotel. Accordingly, the interest earnings of your bank deposits other than those derived from the operation of the said Hotel, are exempt from the 15% withholding tax in the case of savings deposit and 20% in the cause of time deposit and yield from deposit substitutes prescribed by Section 24(cc) of the Tax Code, as amended by Presidential Decree No. 1739. This serves as authority for the depository banks to forego withholding of the final tax on the interest of the deposits maintained by you with them. Very truly yours, RUBEN B. ANCHETA Acting Commissioner