Fees Earned for Services Rendered Outside of the Philippines by Phelps Dodge Copper Products International Corporation

December 2, 1960 BIR RULING NO. 500-60 Phelps Dodge Copper Products Corporation of the Philippines Soriano Building, Manila Gentlemen : This is in reply to your letter dated November 21, 1960 containing the following query: "Attached hereto is BIR Ruling No. 432 series of 1959, exempting Phelps Dodge Copper Products International Corporation have been performed outside of the Philippines and these services consist in the procurement of machineries and equipment, procurement of raw materials, the furnishing of technical information and advise relative to product development and structure and manufacturing techniques, as well as the training of personnel who have been sent to the Philippines from the United States." All compensations received for personal services or labor performed in the Philippines constitute income from sources within the Philippines. If the labor or service was performed outside the territorial limits of the Philippines, the compensation received is income from sources without the Philippines. Only compensation received for personal services or labor performed in the Philippines are subject to Philippine income tax. Accordingly, all fees earned for services rendered outside of the Philippines by the Phelps Dodge Copper Products International Corporation, a non-resident foreign corporation, shall not be considered subject to income tax in the Philippines. In this connection, please be informed further that BIR Ruling No. 432, series of 1959 is still applicable under the same circumstances. The rulings in both cases are predicated on the conditions that the services are necessary and actually rendered and the compensation paid therefor is reasonable. cdta Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue