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DA ITAD Ruling 63-10 Dated June 18 2010
DA ITAD Ruling 63-10 Dated June 18 2010
Gentlemen :
This refers to your application for relief from double taxation dated
February 9, 2009, on behalf of your client Amkor Technology Philippines, Inc.
(ATP), requesting for confirmation of your opinion that the liquidating dividends
to be distributed/remitted by ATP to its sole stockholder, Amkor Technology
Singapore Philippines Holding Pte. Ltd. ("ATSPH") shall not be subject to
Philippine income/capital gains tax, pursuant to Article 13 (3) of the
Philippines-Singapore tax treaty.
Facts
It is represented further that ATI, GAI, ATL, ATSI, ATSPH and ATP all
belong to the Amkor Group of Companies; that the following are the subsequent
transfers: TAaHIE
that on June 26, 2009, the implementation of the earlier mentioned worldwide
corporate restructuring of the Amkor Group of Companies was completed and
stock certificate No. 117 of ATP was eventually issued to ATSPH; that ATSPH
now holds 100% of the outstanding capital stock of ATP; that as of June 26, 2009,
ATP's 100% outstanding capital stock consists of 87,303,854 common shares
including 5 nominal share with a par value of P1.00 is registered in the name of
ATSPH; that on April 2, 2009, a Board of Directors Meeting was held to inform
the need of the ATP to dissolve in order to carry out the worldwide corporate
restructuring plan of the Amkor Group of Companies; that ATP will be dissolved
and liquidating dividends will be distributed/remitted to its sole stockholder,
ATSPH, and that ATP will shorten its corporate term and dissolve formally not
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later than December 31, 2009.
That sometime in December 15, 2009, another Board meeting was held, and
unanimously passed and recommended the following:
that ATP amended Articles of Incorporation has been duly filed with the Securities
and Exchange Commission to approve the dissolution of ATP by its issuance of
"Certificate of Filing of Amended Articles of Incorporation"; that the audited
financial statements of ATP as of December 31, 2009 show that ATP's assets do
not consist primarily of real property interest located in the Philippines;
Ruling
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However, Section 32 (B) (5) of the same Tax Code provides as follows, to
wit:
In this light, the treaty involved is the Philippines-Singapore 1(1) tax treaty
which, in its Article 13, provides as follows:
Article 13
GAINS FROM THE ALIENATION OF PROPERTY
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4. Gains from the alienation of any property, other than those
mentioned in paragraphs 1, 2, and 3 shall be taxable only in the
Contracting State of which the alienator is a resident.
Particulars Dec. 31, 2009 Dec. 31, 2008 Dec. 31, 2007
Property, Plant and
Equipment 203,663,233.00 245,061,960.00 246,410,190.00
Total Assets 520,799,663.00 490,171,071.00 496,958,865.00
Percentage of Real
Property Interest 39% 50% 50%
Accordingly, this Office is of the opinion and so holds that any gain that
may be realized by ATSPH as a result of distributing its liquidating dividends to its
stockholders by ATP is not subject to the capital gains tax imposed under Section
28 (B) (5) (c) of the Tax Code of 1997, and pursuant to the Philippines-Singapore
tax treaty (BIR Ruling No. ITAD 070-04 dated July 13, 2004; BIR Ruling No.
[DA-478-99] dated August 20, 1999; BIR Ruling No. ITAD 002-05 dated January
6, 2005; BIR Ruling No. ITAD 201-02 dated November 25, 2002). Nonetheless,
this transaction is subject to documentary stamp tax pursuant to Section 175 of the
Tax Code of 1997, as amended by Republic Act No. 9243. (BIR Ruling No. ITAD
201-02 dated November 25, 2002).
This ruling is issued on the basis of the facts as represented and is limited
only as to the distribution of liquidating dividends by ATP to ATSPH. This does
not cover however the previous transfer of shares undertaken by the Amkor Group
of companies as mentioned in the representation. If upon investigation it shall be
disclosed that the facts are different, then this ruling shall be without force and
effect insofar as the herein parties are concerned.
Recommending Approval:
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(SGD.) NELSON M. ASPE
Deputy Commissioner
Operations Group
Footnotes
1. Convention between the Republic of the Philippines and the Republic of
Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income.
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Endnotes
1 (Popup - Popup)
1. Convention between the Republic of the Philippines and the Republic of
Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income.
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