ITAD BIR Ruling No. 209-12

May 28, 2012 ITAD BIR RULING NO. 209-12 Imasen Philippines Manufacturing Corporation 101 East Main Avenue Laguna Technopark Bian, Laguna Attention: Mr. Koichi Fukui President Gentlemen : This refers to your Tax Treaty Relief Application ("TTRA") filed on April 14, 2011, on behalf of IMASEN PHILIPPINES MANUFACTURING CORPORATION ("IMASEN PHILS"), requesting confirmation of your opinion that dividends received by Mitsubishi Corporation ("Mitsubishi") from Imasen are subject to the preferential tax rate of 10 percent pursuant to the Convention between the Republic of the Philippines and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter referred to as the "Philippines-Japan tax treaty"), as amended by a Protocol effective January 1, 2009. Relative thereto, please be informed that Section 14 of Revenue Memorandum Order ("RMO") No. 72-2010, published in the Manila Bulletin on October 20, 2010, and effective November 4, 2010, provides that: "Section 14. When and Where to File the TTRA. All tax treaty relief applications (updated BIR Forms No. 0901-D, 0901-I, 0901-R, 0901-P, 0901-S, 0901-T, 0901-O and 0901-C) relative to the implementation and interpretation of the provisions of Philippine tax treaties shall only be submitted to and received by the International Tax Affairs Division (ITAD). If the forms of any necessary documents are submitted to any other BIR office, the application shall be considered as improperly filed. Filing should always be made BEFORE the transaction. Transaction for purposes of filing the TTRA shall mean before the occurrence of the first taxable event . ETHaDC Failure to properly file the TTRA with ITAD within the period prescribed herein shall have the effect of disqualifying the TTRA under this RMO ." (Emphasis Supplied) In view of the foregoing, since the dividends received by Mitsubishi were paid on March 29, 2011, and the subject TTRA was only filed on April 14, 2011, in violation of requirement under RMO 72-2010 that filing of the TTRA should be made BEFORE the transaction, that is the payment of dividend, the subject TTRA is hereby denied. Accordingly, said dividend payment shall be subject to tax at the rate of 30 percent as provided in Section 28 of the Tax Code of 1997, as amended. Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue