Payments Made by Multinational Companies on Outgoing Telecommunications Services are Subject to the 10% Overseas Communications Tax

November 10, 1981 BIR RULING NO. 222-81 290-A 053-79 222-81 PAMURI Phil. Association of Multinational Companies' Regional Headquarters, Inc. 6th Floor Salamin Building Salcedo Street, Legaspi Village Makati, Metro Manila Attention: Mr . A . L . Burridge President Gentlemen : This refers to your letter dated June 11, 1981, requesting confirmation of your exemption from the 10% overseas communications tax prescribed by Section 290-A of the Tax Code of 1977, as amended by Presidential Decree No. 1457. It is represented that the regional or area headquarters of multinational companies authorized to do business in the Philippines are exempt from all forms of local licenses, fees, dues, impost or any other local taxes or burdens under Section 7 of Presidential Decree No. 218. In reply, I regret to inform you that your request cannot be granted for lack of legal basis. Section 290-A of the Tax Code, as amended by Presidential Decree No. 1457, enumerates the instances where the 10% overseas communications tax shall not apply, and multinational companies are not among those enumerated. Accordingly, payments made by multinational companies on outgoing telecommunications services are subject to the 10% overseas communications tax. cdtech Please be guided accordingly. Very truly yours, RUBEN B. ANCHETA Acting Commissioner