Income Tax Cases of the Continental Insurance Company

December 9, 1960 BIR RULING NO. 520-60 1st Indorsement Returned, thru the Revenue Operations Executive (Assessment), to the Chief, Income Tax Division, B.I.R., Manila, the papers bearing on the income tax cases of the Contenental Insurance Company. In previous communications, he had already been advised that, with respect to the withholding tax liability of domestic and resident-foreign insurance companies on reinsurance premiums ceded under the so-called reinsurance treaties executed abroad, the enforcement of the collection thereof for years prior to 1959 may be held in abeyance pending the decision in the representative cases now in court, provided that the insurance companies concerned execute waiver of the statute of limitations. It has been the position of this Office that resident-foreign insurance companies are entitled to 5% of net premiums received in the Philippines as share in head office administration expenses. This allowance has been construed by this Office in two cases now pending in court as 5% of the net income. cdta MELECIO R. DOMINGO Commissioner of Internal Revenue