Amending Revenue Regulations No. 13-78 otherwise known as the Expanded Withholding Tax Regulations

July 24, 1981 REVENUE REGULATIONS NO. 16-81 SUBJECT : Amending Revenue Regulations No. 13-78 Otherwise Known as the Expanded Withholding Tax Regulations TO : All Internal Officers and Others Concerned P ursuant to the provisions of Presidential Decree No. 1351 and in accordance with the provisions of Section 326 in relation to Section 4, both of the National Internal Revenue Code of 1977, the following regulations are hereby promulgated to supplement Revenue Regulations No. 13-78, as amended, providing for the withholding of creditable income taxes on certain payments. casia SECTION 1 . Section 1, Subsection (g), of Revenue Regulations No. 13-78, as amended, is hereby further amended to read as follows: "(g) Income distribution to beneficiaries . On income distributed to beneficiaries of (i) estates, and (ii) trusts involving three distinct parties, i.e., trustor, trustee and beneficiary (ies), which are considered as separate taxable entities under Sections 56 and 57 of the National Internal Revenue Code of 1977, as amended - fifteen per centum (15%)." SECTION 2 . Section 1 of said Revenue Regulations No. 13-78 is hereby further amended by adding a new paragraph denoted as paragraph (h) to read as follows: "(h) Other trust arrangements . On yield/income, not previously subjected to a final tax, pertaining to all and other trust and similar arrangements, whether covered by a trust indenture/agreement or by an investment/portfolio management agreement or any other similar document involving the investment/management of funds: Provided , That any such arrangement (i) does not fall within the purview of the preceding Subsection (g) hereof, and (ii) is not characterized as a trust certificate under the definition of 'deposit substitutes', pursuant to Section 2(g) of Revenue Regulations No. 12-80, as amended by Revenue Regulations No. 8-81 twenty per centum (20%)." cdt "For this purpose, 'yield' shall mean the difference between the amount placed and the amount received upon maturity of the particular investment instrument by its terms by acceleration or otherwise." SECTION 3 . Effectivity . These Regulations shall take effect with respect to yield/income earned on or after August 1, 1981. cdt CESAR E.A. VIRATA Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner