BIR Ruling No. 183-82

May 24, 1982 BIR RULING NO. 183-82 029-b-8 000-78 183-82 Universal Textile Mills, Inc. Baranca, Marikina, Metro Manila Attention: Mr . P . M . Alvarado Chief Accountant Gentlemen : This refers to your letter dated February 15, 1978 requesting a certification to the effect that the interest on the dollar loan which will be paid by the Universal Textile Mills, Inc. in favor of the Export-Import Bank of the United States is exempt from income tax. In reply thereto, I have the honor to inform you that income received by financing institutions owned, controlled, or enjoying refinancing by foreign governments from their investments in the Philippines in loans, stocks, bonds or other domestic securities, or from interest on their deposits in banks in the Philippines are exempt from income tax in accordance with Section 29(C)(8)(A)(2) of the Tax Code, as amended. Such being the case, and inasmuch as the U.S. Eximbank is owned by the U.S. government whose primary function is to aid in financing, this office is of the opinion as it hereby holds that the interest payments on the aforesaid loan which will be remitted to the U.S. Eximbank are not subject to Philippine income tax, and consequently, not also subject to the withholding tax provisions of Section 53(e)(2) in relation to Section 54 of the Tax Code. Very truly yours, RUBEN B. ANCHETA Acting Commissioner