Vous êtes sur la page 1sur 14

Value Added Tax; Exemptions; Vehicles.

The tax exemption privilege of an Embassy and its diplomatic


agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 005-13. January 16, 2013.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 004-13. January 11, 2013.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 003-13. January 11, 2013.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 002-13. January 11, 2013.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 001-13. January 3, 2013.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 011-13. January 25, 2013.
Value Added Tax; Exemptions; Vehicles. A transaction is exempt from VAT when a special law or an
international agreement to which the Philippines is a signatory provides for such exemption. The
Agreement between the Government of the Federal Republic of Germany and the Government of the
Republic of the Philippines Concerning Technical Co-operation (Technical Co-operation Agreement),
together with the Diplomatic Exchange of Notes on May 6, 2002, provides for such exemption. Section
109(K), Tax Code; Par. 4(a), May 6, 2002 Diplomatic Exchange of Notes; Article 5, Agreement between
the Government of the Federal Republic of Germany and the Government of the Republic of the
Philippines Concerning Technical Co-operation. BIR Ruling No. ITAD 009-13. January 22, 2013.

Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 043-12. December 12, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 042-12. December 12, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 041-12. December 12, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 040-12. November 26, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 039-12. November 26, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 038-12. November 16, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 037-12. November 8, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 036-12. November 8, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 035-12. November 5, 2012.

Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 034-12. November 5, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 033-12. October 22, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 032-12. October 16, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 031-12. October 8, 2012.
Value Added Tax; Exemptions; Vehicles. The tax exemption privilege of an Embassy and its diplomatic
agents does not include exemption from VAT on its local purchases of goods and services. However, by
the principle of reciprocity, the exemption may be allowed. Sections 106 and 108, Tax Code; Article 34,
Vienna Convention on Diplomatic Relations. BIR Ruling No. DA-ITAD 030-12. October 8, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 401-12. December 20, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 400-12. December 20, 2012.

Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 399-12. December 20, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 398-12. December 20, 2012.
Value Added Tax; Exemptions; Vehicles. A transaction is exempt from VAT when a special law or an
international agreement to which the Philippines is a signatory provides for such exemption. The
Agreement between the Government of the Federal Republic of Germany and the Government of the
Republic of the Philippines Concerning Technical Co-operation (Technical Co-operation Agreement),
together with the Diplomatic Exchange of Notes on May 6, 2002, provides for such exemption. Section
109(K), Tax Code; Par. 4(a), May 6, 2002 Diplomatic Exchange of Notes; Article 5, Agreement between
the Government of the Federal Republic of Germany and the Government of the Republic of the
Philippines Concerning Technical Co-operation. BIR Ruling No. ITAD 388-12. December 6, 2013.
Value Added Tax; Exemptions; Vehicles. A transaction is exempt from VAT when a special law or an
international agreement to which the Philippines is a signatory provides for such exemption. The
Agreement between the Government of the Federal Republic of Germany and the Government of the
Republic of the Philippines Concerning Technical Co-operation (Technical Co-operation Agreement),
together with the Diplomatic Exchange of Notes on May 6, 2002, provides for such exemption. Section
109(K), Tax Code; Par. 4(a), May 6, 2002 Diplomatic Exchange of Notes; Article 5, Agreement between
the Government of the Federal Republic of Germany and the Government of the Republic of the
Philippines Concerning Technical Co-operation. BIR Ruling No. ITAD 383-12. November 27, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that

foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 382-12. November 22, 2012.
Value Added Tax; Exemptions; Vehicles. A transaction is exempt from VAT when a special law or an
international agreement to which the Philippines is a signatory provides for such exemption. The
Agreement between the Government of the Federal Republic of Germany and the Government of the
Republic of the Philippines Concerning Technical Co-operation (Technical Co-operation Agreement),
together with the Diplomatic Exchange of Notes on May 6, 2002, provides for such exemption. Section
109(K), Tax Code; Par. 4(a), May 6, 2002 Diplomatic Exchange of Notes; Article 5, Agreement between
the Government of the Federal Republic of Germany and the Government of the Republic of the
Philippines Concerning Technical Co-operation. BIR Ruling No. ITAD 380-12. November 20, 2012.
Value Added Tax; Exemptions; Vehicles. A transaction is exempt from VAT when a special law or an
international agreement to which the Philippines is a signatory provides for such exemption. The
Agreement between the Government of the Federal Republic of Germany and the Government of the
Republic of the Philippines Concerning Technical Co-operation (Technical Co-operation Agreement),
together with the Diplomatic Exchange of Notes on May 6, 2002, provides for such exemption. Section
109(K), Tax Code; Par. 4(a), May 6, 2002 Diplomatic Exchange of Notes; Article 5, Agreement between
the Government of the Federal Republic of Germany and the Government of the Republic of the
Philippines Concerning Technical Co-operation. BIR Ruling No. ITAD 379-12. November 20, 2012.
Value Added Tax; Exemptions; Vehicles. A transaction is exempt from VAT when a special law or an
international agreement to which the Philippines is a signatory provides for such exemption. The
Agreement between the Republic of the Philippines and the United Nations Development Programme in
connection with Section 8, Article II of the UN Convention provides for such exemption. Sections 106
and 109, Tax Code; Agreement between the Republic of the Philippines and the United Nations
Development Programme; Section 8, Article II; Section 10, Article III; Section 1, Article 1, Vienna
Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations. BIR
Ruling No. ITAD 373-12. November 13, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 372-12. November 13, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can

submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 361-12. October 22, 2012.
Value Added Tax; Exemptions; The tax exemption privilege of an Embassy and its diplomatic agents does
not include exemption from VAT on its local purchases of goods and services. Nevertheless, under the
principle of reciprocity, the BIR may grant tax exemption to the embassy of a foreign state and to the
members of diplomatic missions on their local purchases of goods and services, provided they can
submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar
tax exemptions to the Philippine embassy or its personnel on their purchases of goods or services in that
foreign country. Sections 106 and 108, Tax Code; Article 34, Vienna Convention on Diplomatic Relations.
BIR Ruling No. DA-ITAD 353-12. October 5, 2012.
Value Added Tax; Zero-Rating; Vehicles. The purchase of vehicles for the Provincial Road Management
Facilitys (PRMF) official use is subject to 0% VAT pursuant to Section 106(A)(2)(C) of the NIRC in relation
to the General Agreement on Development Cooperation (GADC) between the Government of the
Republic of the Philippines (GRP) and the Government of Australia (GOA). Section 106(A)(2)(c), Tax
Code; Articles 5 and 7, GADC between GRP and GOA; Par. 7, Memorandum of Subsidiary Agreement
between GRP and GOA relating to PRMF. BIR Ruling No. ITAD 352-12. October 3, 2012.
Value Added Tax; Ad Valorem Tax; Exemptions; International Agreement. The purchase of a motor
vehicle for the official use of the International Rice Research Institute (IRRI) is exempt from both VAT
and ad valorem tax. The VAT exemption on the purchase is interpreted to mean that the sale of goods
and services to IRRI is effectively zero-rated. Sections 106 and 109(K), Tax Code; Section 5, RR No. 42007; Headquarters Agreement Between the Government of the Republic of the Philippines and the
International Rice Research Institute. BIR Ruling No. DA-ITAD 360-12. October 22, 2012.
Income Tax; Non-resident Foreign Corporaton; Tax Treaty. Under Article 5 of the Philippines-Japan Tax
Treaty, the Philippines, being the source of dividends, is not obliged to limit the tax rates on dividends as
provided in the treaty, if the holding in respect of which the dividends are paid is effectively connected
with a permanent establishment of the company recipient of the dividends in the Philippines, i.e. a
branch office. The holdings in respect of the dividends paid are not effectively connected with a branch
office if (1) they are not paid in respect of holdings forming part of the assets of the branch office, or
otherwise effectively connected therewith; and (2) the business activities which give rise to such
dividends are not conducted through the branch office. Further, there is no effective connection with a
permanent establishment when: (1) the branch office does has no investments nor owns shares of stock
in the company distributing the dividends; (2) the branch office does not use or hold for use in the
conduct of its trade or business any shares of stock of the company distributing the dividend; (3) the
head office in Japan acquired shares in the company distributing the dividends directly and without the
participation of the branch office; (4) dividends arising from the shares inure to the sole benefit of the
head office and not the branch office, (5) the branch office is not a material factor in the realization of

dividends received by the head office. Section 28(B)(1) in relation to Section 32(B)(5), Tax Code; Articles
10 and 5, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 016-13. January 31, 2013.
Income Tax; Non-resident Foreign Corporaton; Tax Treaty. Under Article 5 of the Philippines-Japan Tax
Treaty, the Philippines, being the source of dividends, is not obliged to limit the tax rates on dividends as
provided in the treaty, if the holding in respect of which the dividends are paid is effectively connected
with a permanent establishment of the company recipient of the dividends in the Philippines, i.e. a
branch office. The holdings in respect of the dividends paid are not effectively connected with a branch
office if (1) they are not paid in respect of holdings forming part of the assets of the branch office, or
otherwise effectively connected therewith; and (2) the business activities which give rise to such
dividends are not conducted through the branch office. There is no effective connection with a
permanent establishment when: (1) the branch office does has no investments nor owns shares of stock
in the company distributing the dividends; (2) the branch office does not use or hold for use in the
conduct of its trade or business any shares of stock of the company distributing the dividend; (3) the
head office in Japan acquired shares in the company distributing the dividends directly and without the
participation of the branch office; (4) dividends arising from the shares inure to the sole benefit of the
head office and not the branch office, (5) the branch office is not a material factor in the realization of
dividends received by the head office. Articles 10 and 5, Philippines-Japan Tax Treaty. BIR Ruling No.
ITAD 016-13. January 31, 2013.
Income Tax; Non-resident Foreign Corporaton; Tax Treaty. Dividends arising in the Philippines and paid
to a resident of the Netherlands may be subject to income tax in the Philippines, but the rate of tax that
may be imposed thereon shall not exceed: (a) 10% of the gross amount of dividends if the recipient of
the dividends is a company the capital of which is wholly or partly divided into shares and which holds
directly at least 10 percent of the capital of the company paying the dividends; and (b) 15% of the gross
amount of the dividends in all other cases. Article 10, Philippines-Netherlands Tax Treaty. BIR Ruling No.
ITAD 014-13. January 31, 2013.
Income Tax; Tax Treaty. However, Proctor and Gamble Distributing Philippines apparent independent
status is overridden by the fact that its business activities as exclusive distributor of Proctor and Gamble
products are and will be devoted wholly or almost wholly on behalf of Proctor and Gamble. While
Proctor and Gamble Distributing Philippines may negotiate or contract with third parties for distribution
of items that do not compete with Proctor and Gamble products, the fact that there are no specific third
parties that Proctor and Gamble Distributing Philippines can speak of at this time, and that Proctor and
Gamble Distibuting Philippines as part of the Proctor and Gamble Group of Companies will seek to
service only Proctor and Gamble and other members of the group their common business interest and
trade secrets will make Proctor and Gamble Distributing Philippines to devote its activities wholly or
almost wholly on behalf of Proctor and Gamble. This being the case, income derived by Proctor and
Gamble products in the Philippines shall be subject to income tax in the Philippines pursuant to par. 1,
Article 7 of the Philippines-Switzerland tax treaty. Articles 5 and &, Philippines-Switzerland Tax Treaty,
BIR Ruling No. ITAD 013-13. January 29, 2013.

Income Tax; Interest; Tax Treaty. Under Article 12 of the Philippines-Thailand Tax Treaty, interest arising
in the Philippines and paid to a resident of Thailand may be taxed in the Philippines at a rate not to
exceed: (a) 10% if It is paid in respect of public issues of bonds, debentures or similar obligations; and (b)
15% in all other cases. Since the interest subject of the Loan Agreement between Enkei Philippines and
Thanachart Bank is not paid in respect of public issues of bonds, debentures or similar obligations, such
interest paid to the bank shall be subject to income tax at the rate of 15%. Article 12, PhilippinesThailand Tax Treaty. BIR Ruling No. ITAD 006-13. January 15, 2013.
Income Tax; Dividends; Tax Treaty. Filing of Tax Treaty Relief Applications (TTRAs) should always be
made before the transaction. Transaction for purposes of filing the TTRA shall mean before the
occurrence of the first taxable event. In view of the foregoing, the TTRA for the preferential tax rate of
10% on the dividend payments made by Sanyo Phil to Sanyo is denied for having been filed beyond the
period prescribed. Article 10, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 004-13.
Income Tax; Dividends; Tax Treaty. Under Sec. 28(B)(1) of the NIRC, dividends paid to a nonresident
foreign corporation are taxed at the rate of 30%. However, under Sec. 32(B)(5) of the same Code, such
dividends may be exempt from income tax or subject to a reduced rate to the extent required by any
treaty obligation on the Philippines. Under the Philippines-Netherlands tax treaty, dividends arising in
the Philippines and paid to a resident of the Netherlands may be taxed in the Philippines at a rate not to
exceed (a) 10% if the recipient of the dividends is a company whose capital is wholly or partly divided
into shares and which holds directly at least 10% of the capital of the company paying the dividends; and
(b) 15% in all other cases. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Netherlands
Tax Treaty. BIR Ruling No. ITAD 395-12. December 18, 2012.
Income Tax; Branch Profit Remittance; Tax Treaty. Under Sec. 28(A)(5) of the NIRC, branch profit
remittances are taxed at 15% of the total profits applied or earmarked for remittance without any
deduction for the tax component thereof. However, by virtue of the Philippines-Netherlands Tax Treaty,
a branch qualifies to avail of the 10% preferential tax rate in relation to its branch profit remittances.
Section 28(A)(5), Tax Code; Article 10(7), Philippines-Netherlands Tax Treaty. BIR Ruling ITAD 394-12.
December 12, 2012.
Income Tax; VAT; Tax Treaty. Applying Article 7(1) of the Philippines-Japan Tax Treaty, service fees
received by a nonresident foreign corporation for services rendered in the Philippines shall be taxable in
the Philippines only if it has a permanent establishment in the Philippines in connection with the
activities giving rise to such income. As regards VAT, the sale of goods and services to persons or entities
exempt from VAT, by reason of PD 66 and RA 7916, is effectively zero-rated. However, instead of zerorating which is not available to non-resident suppliers, the provision for exempt transactions under Sec.
109(K) of the Tax Code, which provides VAT exemption for transactions that are exempt under special
laws, e.g. PEZA Law, is applicable. Sections 28(B)(1) and 32(B)(5), Tax Code; Articles 5 and 7, PhilippinesJapan Tax Treaty. BIR Ruling No. 393-12. December 11, 2012.
Income Tax, VAT; Royalties; Tax Treaty. Any availment of tax treaty relief shall be preceded by an
application filed at the ITAD at least 15 days before the intended transaction or payment of income.

Under Art. 12(2)(b) of the Philippines-Japan Tax Treaty, royalties for the use of know-how, secret
formula and trademark in connection with the manufacture and sale or repacking and sale of
monosodium glutamate are subject to income tax at the rate of 10%. Furthermore, under Sec. 108(A) of
the NIRC, royalties paid to a non-resident foreign corporation for the use of know-how, secret formula
and trademark in the Philippines are subject to VAT. Sections 28(B)(1) and 108(A), Tax Code; Article 12,
Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 391-12. December 10, 2012.
Income Tax, Dividends, Tax Treaty. Under the Philippines-Japan Tax Treaty, the Philippines may tax the
dividends paid by a company which is a resident thereof to a company which is a resident of Japan at a
rate not exceeding 10%, if the last-mentioned company holds directly at least 10% of the voting shares
of the company paying the dividends or of the total shares of the first-mentioned company for a period
of 6 months immediately preceding the date of payment of the dividends. In all other cases, the 15%
rate shall apply. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Japan Tax Treaty. BIR
Ruling No. ITAD 390-12. December 10, 2012.
Income Tax; Dividends; Tax Treaty. Under the Philippines-Netherlands tax treaty, the 10% preferential
tax rate on dividends applies whenever the beneficial owner of the dividends is a company, the capital
of which is divided into shares, and owns at least 10% of the capital of the paying company. In all other
cases, the 15% preferential tax rate applies. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10,
Philippines-Netherlands Tax Treaty. BIR Ruling No. ITAD 389-12. December 7, 2012.
General Tax Exemption; International Agreement. If a diplomatic agent is a national of or a permanent
resident in the receiving State, then such diplomatic agent shall enjoy only immunity from jurisdiction
and inviolability, in respect of official acts performed in the exercise of his functions. Thus, if the ACB
Executive Director is a national of or permanently residing in the Philippines. Host Country Agreement
between the Government of the Republic of the Philippines and the ASEAN Centre for Biodiversity;
Articles 34 and 38, Vienna Convention BIR Ruling No. ITAD 387-12. December 4, 2012.
Income Tax, Dividends, Tax Treaty. Under the Philippines-Japan Tax Treaty, dividends arising in the
Philippines and paid to a resident of Japan may be taxed in the Philippines at the rate not to exceed 10%
of the gross amount of the dividends if the dividends are paid by a company, being a resident of the
Philippines, registered with the BOI and engaged in preferred pioneer areas of invesments under the
investment incentives laws of the Philippines. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10(3),
Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 386-12. December 3, 2012.
Income Tax; Non-resident Foreign Corporaton; Dividends; Tax Treaty. Under Article 5 of the PhilippinesJapan Tax Treaty, the Philippines, being the source of dividends, is not obliged to limit the tax rates on
dividends as provided in the treaty, if the holding in respect of which the dividends are paid is effectively
connected with a permanent establishment of the company recipient of the dividends in the Philippines,
i.e. a representative office. The holdings in respect of the dividends paid are not effectively connected
with a representative office if (1) they are not paid in respect of holdings forming part of the assets of
the office, or otherwise effectively connected therewith; and (2) the business activities which give rise to
such dividends are not conducted through a representative office. Further, there is no effective

connection with a permanent establishment when: (1) the office does has no investments nor owns
shares of stock in the company distributing the dividends; (2) the office does not use or hold for use in
the conduct of its trade or business any shares of stock of the company distributing the dividend; (3) the
head office in Japan acquired shares in the company distributing the dividends directly and without the
participation of the representative office; (4) dividends arising from the shares inure to the sole benefit
of the head office and not the representative office, (5) the representative office is not a material factor
in the realization of dividends received by the head office. Section 28(B)(1) in relation to Section
32(B)(5), Tax Code; Articles 10(2)(a), Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 385-13. December
3, 2013.
Income Tax, Dividends, Tax Treaty. Under the Philippines-Japan Tax Treaty, the Philippines may tax the
dividends paid by a company which is a resident thereof to a company which is a resident of Japan at a
rate not exceeding 10%, if the last-mentioned company holds directly at least 10% of the voting shares
of the company paying the dividends or of the total shares of the first-mentioned company for a period
of 6 months immediately preceding the date of payment of the dividends. In all other cases, the 15%
rate shall apply. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Japan Tax Treaty. BIR
Ruling No. ITAD 384-12. November 27, 2012.
Income Tax; Dividends; Tax Treaty. Under the Philippines-Netherlands tax treaty, the 10% preferential
tax rate on dividends applies whenever the beneficial owner of the dividends is a company, the capital
of which is divided into shares, and owns at least 10% of the capital of the paying company. In all other
cases, the 15% preferential tax rate applies. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10,
Philippines-Netherlands Tax Treaty. BIR Ruling No. ITAD 381-12. November 22, 2012.
Income Tax; Interest; International Agreement. Officials of the International Organization for Migration
are accorded tax exemption only on salaries and emoluments received by them. The exemption does
not cover interest income. Section 32(B), Tax Code; Convention on the Privileges and Immunities of the
Specialized Agencies of the UN; Cooperation Agreement between the Government of the Republic of
the Philippines and the International Organization for Migration. BIR Ruling No. ITAD 378-12. November
20, 2012.
Income Tax; Royalties; Tax Treaty. Under Art. 12 of the Philippines-Japan Tax Treaty, royalties for the use
of a house mark and logo, being payments for the use of trademark, and not for cinematographic films
and films or tapes for radio or television broadcasting, are subject to income tax at the rate of 10%.
Sections 28(B)(1), Tax Code; Article 12, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 010-13. January
22, 2013.
Income Tax; Royalties; Tax Treaty. Under Art. 12 of the Philippines-Japan Tax Treaty, royalties for the use
of know-how, and not for cinematographic films and films or tapes for radio or television broadcasting,
are subject to income tax at the rate of 10%. Section 28(B)(1), Tax Code; Article 12, Philippines-Japan Tax
Treaty. BIR Ruling No. ITAD 008-13. January 21, 2013.
Income Tax; Royalties; Tax Treaty. Any availment of tax treaty relief shall be preceded by an application
filed at the ITAD at least 15 days before the intended transaction or payment of income. Under Art. 12

of the Philippines-Japan Tax Treaty, royalties for the use of know-how on the manufacture of parts for
automobiles, motorcycles and other power products, and not for cinematographic films and films or
tapes for radio or television broadcasting, are subject to income tax at the rate of 10%. Section 28(B)(1),
Tax Code; Article 12, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 007-13. January 15, 2013.
Income Tax; Royalties; Tax Treaty. Any availment of tax treaty relief shall be preceded by an application
filed at the ITAD at least 15 days before the intended transaction or payment of income. Under Art. 12
of the Philippines-Japan Tax Treaty, royalties for the use of know-how and process in connection with
the manufacture and sale of printed circuit boards and electric parts, and not for cinematographic films
and films or tapes for radio or television broadcasting, are subject to income tax at the rate of 10%.
Section 28(B)(1), Tax Code; Article 12, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 005-13. January
15, 2013.
Income Tax; Interest; Tax Treaty. Any availment of tax treaty relief shall be preceded by an application
filed at the ITAD at least 15 days before the intended transaction or payment of income. Under the
Philippines-Thailand Tax Treaty, interest arising from the Philippines is subject to income tax at the
reduced rate of 15% of the gross amount thereof. Sections 28(B)(5)(a) and 32(B)(5), Tax Code; Article
10(2)(a), Philippines-Thailand Tax Treaty. BIR Ruling No. ITAD 003-13. January 15, 2013.
Income Tax; Royalties; Tax Treaty. Under the Philippines-Korea Tax Treaty, royalty payments to a noresident Korean corporation may be taxed at a preferential tax rate of 10% if the payor is registered with
the Board of Investments and engaged in preferred pioneer areas of investment, and 15% of the gross
amount of royalties in all other cases. Filing of tax treaty relief applications should be made before the
transaction, that is the payment of royalties. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 12,
Philippines-Korea Tax Treaty. BIR Ruling No. ITAD 002-13. January 15, 2013.
Income Tax; Dividends; Tax Treaty. Under the Philippines-Netherlands tax treaty, the 10% preferential
tax rate on dividends applies whenever the beneficial owner of the dividends is a company, the capital
of which is divided into shares, and owns at least 10% of the capital of the paying company. In all other
cases, the 15% preferential tax rate applies. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10,
Philippines-Netherlands Tax Treaty. BIR Ruling No. ITAD 409-12. December 26, 2012.
Income Tax, Dividends, Tax Treaty. Under the Philippines-Japan Tax Treaty, the Philippines may tax the
dividends paid by a company which is a resident thereof to a company which is a resident of Japan at a
rate not exceeding 10%, if the last-mentioned company holds directly at least 10% of the voting shares
of the company paying the dividends or of the total shares of the first-mentioned company for a period
of 6 months immediately preceding the date of payment of the dividends. In all other cases, the 15%
rate shall apply. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Japan Tax Treaty. BIR
Ruling No. ITAD 407-12. December 20, 2012.
Income Tax, Dividends, Tax Treaty. Under the Philippines-Switzerland Tax Treaty, dividends paid by a
Philippine corporation to a resident of Switzerland may be taxed at a rate not exceeding 10% of the
gross amount of dividends if the recipient is a company which holds directly at least 10 percent of the
capital of the Philippine corporation; and 15% if the shareholdings of the recipient company is below

10% of the capital of the paying company. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10,
Philippines-Switzerland Tax Treaty. BIR Ruling No. ITAD 406-12. December 20, 2012.
Income Tax; Dividends; Tax Treaty. Dividends arising in the Philippines and paid to a resident of the
Netherlands may be subject to income tax in the Philippines, but the rate of tax that may be imposed
thereon shall not exceed: (a) 10% of the gross amount of dividends if the recipient of the dividends is a
company the capital of which is wholly or partly divided into shares and which holds directly at least 10
percent of the capital of the company paying the dividends; and (b) 15% of the gross amount of the
dividends in all other cases. Article 10, Philippines-Netherlands Tax Treaty. BIR Ruling No. ITAD 405-12.
December 20, 2012.
Income Tax; Dividends; Tax Treaty. Dividends arising in the Philippines and paid to a resident of Japan
may be taxed in the Philippines at a rate not to exceed (a) 10% if the company recipient of the dividends
holds directly at least 10% of the voting shares or the total shares of the company paying the dividends,
during the period of 6 months immediately preceding the date of payment of the dividends, or if the
latter company is registered with the Board of Investments and engaged in preferred areas of
investment under the investment incentive laws of the Philippines, and (b) 15% in all other cases.
Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD
404-12. December 20, 2012.
Income Tax; Dividends; Tax Treaty. Dividends arising in the Philippines and paid to a resident of the
Netherlands may be subject to income tax in the Philippines, but the rate of tax that may be imposed
thereon shall not exceed: (a) 10% of the gross amount of dividends if the recipient of the dividends is a
company the capital of which is wholly or partly divided into shares and which holds directly at least 10
percent of the capital of the company paying the dividends; and (b) 15% of the gross amount of the
dividends in all other cases. Article 10, Philippines-Netherlands Tax Treaty. BIR Ruling No. ITAD 403-12.
December 20, 2012.
Income Tax; Non-resident Foreign Corporaton; Tax Treaty. Under Article 5 of the Philippines-Japan Tax
Treaty, the Philippines, being the source of dividends, is not obliged to limit the tax rates on dividends as
provided in the treaty, if the holding in respect of which the dividends are paid is effectively connected
with a permanent establishment of the company recipient of the dividends in the Philippines, i.e. a
branch office. There is no effective connection with a permanent establishment when: (1) the branch
office has no investments nor shares of stock in the company distributing the dividends; (2) the branch
office does not use or hold for use in the conduct of its trade or business any shares of stock of the
company distributing the dividend; (3) dividends arising from the shares inure to the sole benefit of the
head office and not the branch office, (4) the branch office is not a material factor in the realization of
dividends received by the head office. Section 28(B)(1) in relation to Section 32(B)(5), Tax Code; Articles
10 and 5, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 402-12. December 20, 2013.
Income Tax, Dividends, Tax Treaty. Under the Philippines-Switzerland Tax Treaty, dividends arising in the
Philippines and paid to a resident of Switzerland may be taxed in the Philippines at a rate not to exceed
(a)10% if the company recipient of the dividends holds directly at least 10% of the capital of the paying

company; and (b) 15% in all other cases. Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, PhilippinesSwitzerland Tax Treaty. BIR Ruling No. ITAD 396-12. December 19, 2012.
Income Tax; Royalties; Tax Treaty. Under Art. 12 of the Philippines-Japan Tax Treaty, royalties not for the
use of or the right to use cinematographic films and films or tapes for radio or television broadcasting,
are subject to income tax at the rate of 10%. Any availment of income tax treaty relief shall be preceded
by an application with the ITAD at least 15 days before the transaction. Section 28(B)(1), Tax Code;
Article 12, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 376-12. November 16, 2012.
Income Tax; Dividends; Tax Treaty. Dividends arising in the Philippines and paid to a resident of Japan
may be taxed in the Philippines at a rate not to exceed (a) 10% if the company recipient of the dividends
holds directly at least 10% of the voting shares or the total shares of the company paying the dividends,
during the period of 6 months immediately preceding the date of payment of the dividends, or if the
latter company is registered with the Board of Investments and engaged in preferred areas of
investment under the investment incentive laws of the Philippines, and (b) 15% in all other cases.
Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD
375-12. November 16, 2012.
Income Tax; Non-resident Foreign Corporaton; Tax Treaty. Dividends arising in the Philippines and paid
to a resident of the Netherlands may be subject to income tax in the Philippines, but the rate of tax that
may be imposed thereon shall not exceed: (a) 10% of the gross amount of dividends if the recipient of
the dividends is a company the capital of which is wholly or partly divided into shares and which holds
directly at least 10 percent of the capital of the company paying the dividends; and (b) 15% of the gross
amount of the dividends in all other cases. Sections 28(B)(1) and 32(B)(5|), Tax Code; Article 10,
Philippines-Netherlands Tax Treaty. BIR Ruling No. ITAD 374-12. January 16, 2012.
Income Tax; Interest; Tax Treaty. Any availment of tax treaty relief shall be preceded by an application
filed with the ITAD at least 15 days before the intended transaction or payment of income. Under the
Philippines-Japan Tax Treaty, interest arising in the Philippines and paid to a resident of Japan is subject
to income tax at a rate not to exceed 10%. . Sections 28(B)(5)(a) and 32(B)(5), Tax Code; Article 11,
Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 370-12. October 31, 2012.
Income Tax; Dividends; Tax Treaty. Dividends arising in the Philippines and paid to a resident of Japan
may be taxed in the Philippines at a rate not to exceed (a) 10% if the company recipient of the dividends
holds directly at least 10% of the voting shares or the total shares of the company paying the dividends,
during the period of 6 months immediately preceding the date of payment of the dividends, or if the
latter company is registered with the Board of Investments and engaged in preferred areas of
investment under the investment incentive laws of the Philippines, and (b) 15% in all other cases.
Sections 28(B)(1) and 32(B)(5), Tax Code; Article 10, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD
369-12. October 31, 2012.
Income Tax, VAT; Royalties; Tax Treaty. Any availment of tax treaty relief shall be preceded by an
application filed at the ITAD at least 15 days before the intended transaction or payment of income.
Under Art. 12 of the Philippines-Singapore Tax Treaty, royalties arising in the Philippines and paid to a

resident of Singapore may be taxed in the Philippines at a rate not to exceed (1)15% if the royalties are
paid by an enterprise registered with the Board of Investments and engaged in preferred areas of
activities, or if the royalties are paid in respect of cinematographic films or tapes for television or
broadcasting; and (b) 25% in all other cases. Accordingly, since the brand license fees are not paid in
respect of the use of, or the right to use of, cinematographic films or tapes for television or
broadcasting, but for the use of trademark, and since the company paying the fees is not registered with
the Board of Investments as such, such brand license fees are subject to income tax at the rate of 25%.
Sections 28(B)(1) and 108(A), Tax Code; Article 12, Philippines-Singapore Tax Treaty. BIR Ruling No. ITAD
368-12. October 31, 2012.
Income Tax; Royalties; Tax Treaty. Any availment of tax treaty relief shall be preceded by an application
filed at the ITAD at least 15 days before the intended transaction or payment of income. Under Art. 12
of the Philippines-Japan Tax Treaty, royalties for the use of know-how, i.e. the right to use technical
information on the manufacture of optical disc drives, optical pick-up units, plain paper copiers and the
right to use the Environmental Information System, are subject to income tax at the rate of 10%. Section
28(B)(1), Tax Code; Article 12, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 365-12. October 24,
2012.
Income Tax; Royalties; Tax Treaty. Any availment of tax treaty relief shall be preceded by an application
filed at the ITAD at least 15 days before the intended transaction or payment of income. Under Art. 12
of the Philippines-Germany Tax Treaty, royalties for the use of trademark are subject to income tax at
the rate of 10%. Section 28(B)(1), Tax Code; Article 12, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD
364-12. October 24, 2012.
Income Tax; Interest; Tax Treaty. Under Art. 11 of the Philippines-Japan Tax Treaty, interests on foreign
loans which are generally taxable at 20% may qualify for a preferential rate of 10% of the gross thereof if
the recipient of the interest is also the beneficial owner thereof. However, said 10% shall not apply if the
Japanese corporation has a permanent establishment in the Philippines to which the subject interest
income is effectively connected to. Any availment of tax treaty relief shall be preceded by an application
filed at the ITAD at least 15 days before the intended transaction or payment of income. Section
28(B)(1), Tax Code; Article 11, Philippines-Japan Tax Treaty. BIR Ruling No. ITAD 364-12. October 24,
2012.