Amount of Tax Paid on the Dividends of a Domestic Corporation to be Remitted to a Non-resident Foreign Corporation is Subject to 15% Withholding Tax

October 20, 1987 BIR RULING NO. 324-87 25 (b) (5) (B) 228-82 324-87 Gentlemen : This refers to your letter dated September 24, 1987 requesting confirmation of your opinion to the effect that the dividends which Globe-Mackay Cable and Radio Corporation (GMCR) will remit to ITT Communications Services, Inc. (formerly American Cable and Radio Corporation), a non-resident foreign corporation domiciled in the United States is subject to withholding tax at the rate of 15%. It is represented that GMCR is a domestic corporation, 40% of the outstanding common shares of stock of which is owned by the aforenamed foreign corporation. adc In view thereof, and considering that under the present provisions of the U.S. Federal Tax Code, the amount of tax deemed paid on such dividends, and accordingly, to be credited against U.S. tax on said dividends, meets the 20% requirement of Section 25 (b)(5)(B) of the Tax Code, as amended by Executive Order No. 37, this Office hereby confirms your opinion that the dividends which GMCR will remit to ITT Communications Services, Inc. domiciled in U.S. are subject to withholding tax at the rate of 15% only. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner