BIR Ruling [UN-289-95]

August 3, 1995 BIR RULING [UN-289-95] Joaquin Cunanan & Co. 8th Floor BA-Lepanto Building 8747 Paseo de Roxas Makati, Metro Manila Attention: Mr . George T . J . Lavadia Principal Gentlemen : This refers to your letter dated March 27, 1995 regarding the application of your client, the Philippine Branch of Encyclopaedia Britannica (Philippines). Inc. (EBPI), for the grant of relief from doubled taxation under the RP-US Tax Treaty. cd It is represented that EBPI is a corporation organized under the laws of Delaware, U.S.A.; that it has an existing Film Distribution Agreement with Encyclopaedia Britannica Educational Corporation (EBEC), a corporation organized and existing under the laws of New York, U.S.A.; that under the agreement EBEC has been appointed as the exclusive distributor of video cassettes in the Philippines; that in consideration for the appointment, EBEC is entitled to receive royalty equivalent to $3.00 per video; and that relief from double taxation under said Treaty is in accordance with the one granted for five (5) years to the Columbia Tri-star film Distributors, Inc., USA on the royalties paid to such corporation by its Philippine Branch, which expired last January 4, 1995. In reply, please be informed that pursuant to Article 13 (2) (b) (iii) of the RP-US Tax Treaty, in relation to Article IX(1) of the RP-Denmark Tax Treaty on the principle of "most-preferred nation clause", the royalties are subject to 10% tax rate which should be withheld before actual remittance. (Unnumbered BIR Ruling dated January 11, 1995) This approval shall be valid for five (5) years effective January 5, 1995, unless otherwise earlier revoked by this Office. This ruling is issued on the basis of the foregoing representations. However, if upon investigation, it will be disclosed that the facts are different and/or any of the requirements imposed in this letter is not complied with, then ruling shall be declared as null and void. aisadc Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)