BIR Ruling No. 177-84

November 12, 1984 BIR RULING NO. 177-84 24-cc-000-00-177-84 Gentlemen : This is with reference to your request for a ruling on behalf of your client, GTE International, Inc., a U.S. company that its interest income from money market placements is subject to the 15% tax pursuant to Article 12(2) of the RP-US Tax Treaty; and that the 15% is a final tax to be withheld by the bank or financial intermediary concerned. It is represented that GTE International, Inc. is a corporation organized and existing under the laws of Delaware U.S.A. and is not engaged in trade or business in the Philippines. It has peso funds in the Philippines which it intends to place in interest bearing Promissory Notes issued by Philippine banks. In reply, please be informed that Article 12(2) of the RP-US Tax Treaty provides: "(2) Interest derived by a resident of one of the Contracting States from sources within the other Contracting States shall not be taxed by the other Contracting State at a rate in excess of 15% of the gross amount of such interest." In view thereof, the interest income from money market placements in the Philippines earned by GTE International, Inc. is subject to 15% withholding tax; and that the said 15% is a final tax to be withheld by the bank or financial intermediary concerned. cdta Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner