BIR Ruling No. 405-13

November 8, 2013 BIR RULING NO. 405-13 Section 32 (B) (7) (a) of NIRC of 1997, as amended Manabat Sanagustin & Co. The KPMG Center, 9/F 6787 Ayala Avenue Makati City 1226 Attention: Maria Myla S. Maralit Partner, Tax Gentlemen : This refers to your letter dated 26 March 2013 requesting on behalf of your client, MONETARY AUTHORITY OF SINGAPORE, for confirmation of the validity of Bureau of Internal Revenue (BIR) Ruling [DA-(FIT-026) 861-09] dated 28 December 2009 for taxable year 2013 and subsequent years, without need for subsequent revalidation as long as MONETARY AUTHORITY OF SINGAPORE remains qualified for the exemption under Section 32 (B) (7) (a) of the National Internal Revenue Code of 1997, as amended. aDSHIC It is represented that the MONETARY AUTHORITY OF SINGAPORE is a body corporate of the Government of Singapore established in 1 January 1971 under the Monetary Authority of Singapore Act (Chapter 186). The principal objects of MONETARY AUTHORITY OF SINGAPORE under the Monetary Authority of Singapore Act are to: "a. Maintain price stability conducive to sustainable growth of the economy; b. Foster a sound and reputable financial centre; c. Ensure prudent and effective management of the official foreign reserves of Singapore; and d. Grow Singapore as an internationally competitive financial centre. Its principal functions provided under the Monetary Authority of Singapore Act are to: a. Act as Central bank of Singapore, including the conduct of monetary policy, the issuance of currency the oversight of payment systems and serving as banker to and financial agent of the Government; b. Conduct integrated supervision of financial services and financial stability surveillance; c. Manage the official foreign reserves of Singapore; and d. Develop Singapore as an international financial centre." Pursuant to its function of acting as banker and financial agent of the Government of Singapore, MONETARY AUTHORITY OF SINGAPORE has several investments in the Philippines. As a financial institution owned and controlled by the Government of Singapore, any income derived by the MONETARY AUTHORITY OF SINGAPORE in the Philippines, in loans, stocks, bonds or domestic securities, or from interest on deposits in banks in the Philippines are exempt from income from income tax and withholding tax in the Philippines pursuant to Section 32 (B) (7) (a) of the National Internal Revenue Code of 1997, as amended. In support of your request, you have submitted the following documents: 1. Original Copy of duly notarized and authenticated Certificate of Tax Residence for MONETARY AUTHORITY OF SINGAPORE for year 2013 for Philippines certifying that MONETARY AUTHORITY OF SINGAPORE is a Statutory Board constituted by an Act of Parliament and is the Central Bank established by the Government of Singapore; CSDcTH 2. Original copy of the duly notarized and authenticated Monetary Authority of Singapore (Chapter 186) creating the MONETARY AUTHORITY OF SINGAPORE; and 3. Original copy of the duly notarized and authenticated Special Power of Attorney in favor of Manabat Sanagustin and Co., CPAs. In reply, please be informed that Section 32 (B) (7) (a) of the National Internal Revenue Code of 1997, as amended provides that income derived from investments in the Philippines in loans, stocks, bonds or other domestic securities, or from interest on deposits in banks in the Philippines by (i) foreign governments; (ii) financial institutions owned and controlled, or enjoying refinancing from foreign governments, and (iii) international or regional financial institutions established by foreign governments shall not be included in gross income and shall be exempt from taxation. Accordingly, since as represented the MONETARY AUTHORITY OF SINGAPORE is a financial institution owned, controlled and financed by the State of Singapore as contemplated under Section 32 (B) (7) (a) (ii) of the National Internal Revenue Code of 1997, as amended, any income received by the MONETARY AUTHORITY OF SINGAPORE from its investment in the Philippines, such as interest on loans, interest on bonds, dividends, and capital gains on sale of shares of stock, bonds, and other domestic securities, are exempt from Philippine income tax and consequently from withholding tax. This ruling is issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue