ITAD Ruling No. 009-99

July 20, 1999 ITAD RULING NO. 009-99 RP-Netherlands Art. 21 J.A.C.A. Overgaauw Director for International Tax Policy and Legislation Ministry of Finance The Netherlands S i r : This refers to your letter IFZ99/87 M dated January 26, 1999 informing us on the guidelines/procedure on how residents of the Philippines can claim refund of Dutch dividend tax, and the introduction of euro currency in your country. However, as mentioned in your letter dated January 26, 1999, the said new euro currency may affect Art. 21, Paragraph 1 (b)(ii) of the RP-Netherlands Tax Convention, which states that: "xxx xxx xxx any remuneration for personal services performed in the first-mentioned State in an amount not in excess of 5,000 guilders or the equivalent in Philippine currency, as the case may be, for any taxable year. xxx xxx xxx" You suggested that in the said Article, guilder can be read as euro taking into account the exchange rate of the euro vis a vis the guilder. We propose, however, that a protocol be made on the said change. In a previous letter - IFZ98/968 U you requested information on two subjects, namely: (a) Philippine revenue regulations for the implementation of the RP-Netherlands Tax Convention; and, (b) possible reduction of or exemption from inheritance tax based on reciprocity of Philippine and Dutch organizations established primarily for purposes of public benefit in connection with a legacy made by a resident of the Netherlands to St. Michaels College, Cantillan, Surigao del Sur. In reply, please be informed that, as regards the first subject, we have no revenue regulation for the implementation specifically of the RP-Netherlands Tax Convention. However, for your reference, we have Revenue Memorandum Order No. 10-92 ( a copy of which is attached herewith) dealing with procedures for tax treaty relief applications and processing thereof. As to the second subject, a letter in response to the said query (dated October 1998) had already been made, a copy of which is also attached herewith. LibLex Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue