Subsidiary's Remittance of Profits or Dividends to Dunlop International A.G. Switzerland Subject to 15% Withholding Tax Rate

October 4, 1985 BIR RULING NO. 178-85 24-h 000-00 178-85 Gentlemen : This refers to your letter dated March 27, 1985 requesting information on the rate of withholding tax applicable to profits or dividends remitted to the United Kingdom and the rate of withholding tax applicable if the dividend is remitted to Switzerland. It is represented that you are a domestic corporation existing under the laws of the Philippines; that you are a subsidiary of Dunlop International A. G. of Switzerland and which is a wholly-owned subsidiary of Dunlop Holding PLC of the United Kingdom. In reply, please be informed that since you are a subsidiary of Dunlop International A. G. Switzerland, you will be remitting profits or dividends to the said country. Hence, the RP-UK Tax Treaty cannot be applied. On the assumption that residents of Switzerland are also shareholders of your company, considering that the Philippines does not have a tax treaty with Switzerland, Sec. 24(b)(1)(iii) of the Tax Code will apply to dividends remitted to that country. Accordingly, and since Switzerland does not impose any tax on dividends received from foreign sources, (BIR Ruling No. 30-80 dated February 15, 1980), the dividends to be remitted by your company to Switzerland will be subject to withholding tax rate of 15%. aisadc Very truly yours, (SGD.) RUBEN A. ANCHETA Acting Commissioner