Atty. R. A. Noval

January 25, 1984 Atty. R. A. Noval Tax Division Sycip, Gorres, Velayo & Co. 6760 Ayala Avenue Makati, Metro Manila Sir : This is in reply to your letter dated October 3, 1983 requesting for a confirmation that your client, the Philippine regional headquarters of American Express International, Inc. is permitted to book and receive dollar remittances from its affiliates/representative offices in Asia in addition to the more than Fifty Thousand U.S. Dollars it receives from the head office in the United States. It appears that subject company is a Philippine regional headquarters of a multinational company established pursuant to the provisions of P. D. No. 218, as amended. Its representative office in Asia are travel agencies which it does not own but are separate entities authorized to use American Express International name only. The annual fees or dues paid by these representative offices are in dollars and are proposed to be remitted to and booked by the Philippine regional headquarters instead of the head office in the United States. These remittances represent annual fees paid by the representative offices in consideration for their appointment as American Express Travel Service Representative in their respective areas and for the use of the name "American Express International". You believe that said remittances are not prohibited under P. D. No. 218, as amended, since they represent foreign currency income from sources outside the Philippines which do not arise from transactions or activities performed in the Philippines. Presidential Decree No. 218, as amended provides, as follows: "SECTION 8. . . . xxx xxx xxx (2) The headquarters will not derive any income from sources within the Philippines and will not participate in the management of the subsidiary or branch office it might have in the Philippines." (Emphasis supplied) xxx xxx xxx "(c) . . . Annually, within thirty days from the anniversary date of the multinational company's registration as a regional or area headquarters with the Securities and Exchange Commission, it will submit proof to the Securities and Exchange Commission of inward remittance amounting to at least fifty thousand United States dollars or its equivalent on other foreign currencies during the past years." (emphasis supplied) Considering that the dollar remittances which the company will receive from its representatives in Asia constitute income from sources outside the Philippines , the Commission will not interpose any objection thereto. cdll Attached herewith for further information is a xeroxed copy of the 3rd Indorsement letter of the Foreign Exchange Department of the Central Bank of the Philippines dated December 27, 1983 interposing no objection to your proposal. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman