Save the Children Federation Now Subject to 15% Final Tax on Interest Income

October 16, 1985 BIR RULING NO. 183-85 24-cc 000-00 183-85 Gentlemen : This refers to your letter dated December 11, 1984 requesting a ruling as to whether your interest income from Philippine currency bank deposits is exempt from the 15% final withholding tax in view of your exemption from any and all taxes under Presidential Decree No. 1900. In reply, please be informed that under Section 24(cc) and 53(d)(1) of the Tax Code as amended by Presidential Decree No. 1959 which took effect on October 15, 1984, a final withholding tax of 15% shall now be imposed on interest income from Philippine currency bank deposits, whether savings or time deposits, and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangement. (Rev. Regs. No. 17-84) Under the said amendment, the provision on the exemption from the withholding tax if the recipient of the income is exempt from income taxation has been abolished. The amendment which deleted among others, the exempting provisions of the old law is a clear manifestation that the single 15% tax rate is imposable on all interest income from deposits, deposit substitutes, trust funds and similar arrangements, regardless as to the tax status or character of the recipients thereof. (RMC No. 31-84) Such being the case, the Save the Children Federation, Inc. is now subject to the 15% final tax on interest income and/or yield from deposit substitute instruments and interest on its savings and time deposits paid or accrued beginning October 15, 1984. (Revenue Regulations No. 17-84) Very truly yours, (SGD.) TOMAS C. TOLEDO Acting Commissioner