BIR Ruling No. 170-83

September 30, 1983 BIR RULING NO. 170-83 Gentlemen : This refers to your letter dated December 9, 1982 requesting a ruling to the effect that the fiscal agency fees which Jardine Davies, Inc. (JDI) pays to Jardine Matheson & Co. Ltd. (JM) are exempt from Philippine withholding tax. It is represented that JDI is a domestic corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines; that JM is a limited company existing under the laws of Hong Kong; that on August 23, 1979, JDI and JM entered into a contract whereby JDI appointed JM as agent and attorney-in-fact for the purpose of doing business outside the Philippines; and that for JM's services, JDI will pay an agency fee of US$10,000 per month. In reply, I have the honor to inform you that fiscal agency fees for services as agent and attorney-in-fact performed abroad by JM are considered income derived from sources outside the Philippines. Accordingly, and since a non-resident foreign corporation is subject to income tax only on income from sources within the Philippines, the remittances to be made by JDI to JM are not subject to income tax and consequently, to the 35% withholding tax prescribed by Section 24(b)(l) in relation to Section 53(e)(2) of the Tax Code, as amended. cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue