Presidential Decree No. 131

July 22, 1975 REVENUE REGULATIONS NO. 04-75 SUBJECT : Presidential Decree No. 131 Amending Sections 24 (b)(1) and 53(b)(2) of the National Internal Revenue Code by Imposing a Tax of Fifteen Percent (15%) on Interest on Foreign Loans TO : All Internal Revenue Officers and Others Concerned SECTION 1. Scope . Pursuant to Presidential Decree No. 131 dated February 19, 1973 these regulations are hereby promulgated and shall be known as Revenue Regulations No. 4-75. SECTION 2. Definition of Foreign Loan . For purposes of these regulations, the term "foreign loan", shall refer to loan contracts, including all debt items, whether in kind or in cash, which are payable in foreign currency or in kind, entered into by a Philippine resident, corporate or otherwise, with a non-resident. These consist of loans of the Central Bank, the National Government and its instrumentalities, government corporations and financial institutions; loans of the private sector including trade credits (D/A & O/A), which are normally renewable and other revolving credit arrangements. Therefore, foreign loans shall include the purchase of goods and services on credit by a Philippine resident from a non-resident either under deferred payment terms or on installment. The Bureau of Internal Revenue shall have the power to impute interest in case the loan contracts do not bear interest. SECTION 3. Return and Payment of tax withheld . Every withholding agent shall make a return in duplicate, on BIR Form 1743D of the 15% tax withheld from interest on foreign loan and pay such tax within twenty-five (25) days from the close of each calendar quarter. Such withholding agent shall submit under BIR Form 1743 an annual return of income tax withheld during the year on or before January 31, of the succeeding year. SECTION 4. Effectivity . These regulations take effect immediately. cdta ALFREDO PIO DE RODA, JR. Acting Secretary Recommended by: MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5 ANNEX A 1st Indorsement September 8, 1975 Respectfully returned to the Commissioner of Internal Revenue, Manila, the within Revenue Regulations No. 4-75 issued pursuant to Presidential Decree No. 131 dated February 19, 1973 amending Sections 24(b)(1) and 53(b)(2) of the National Internal Revenue Code by imposing a tax of fifteen percent (15%) on interest on foreign loans, duly approved. ALFREDO PIO DE RODA, JR. Acting Secretary ANNEX B August 22, 1975 The Honorable The Secretary of Finance M a n i l a S i r : I have the honor to forward herewith Revenue Regulations No. 4-75, the subject matter of which is "Presidential Decree No. 131 amending Sections 24(b)(1) and 53(b)(2) of the National Internal Revenue Code by imposing a tax of fifteen percent (15%) on interest on foreign loans, for your approval. This is the retyped copy of the original draft which was returned here with certain corrections in accordance with our previous talk on the matter. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5