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NON-RESIDENT

FOREIGN
CORPORATION
NON-RESIDENT FOREIGN
CORPORATION, SECTION 28(B)
GENERAL PRINCIPLE

Commissioner of Internal Revenue vs SC Johnson and Son, Inc.


GENERAL PRINCIPLE

Marubeni Corporation vs CIR


GENERAL PRINCIPLE

N.V. Reederij "Amsterdam vs CIR


INTEREST ON FOREIGN LOANS

(a) Interest on Foreign Loans. - A final withholding tax at the rate of


twenty percent (20%) FWT is hereby imposed on the amount of interest
on foreign loans contracted on or after August 1, 1986.
(RA 9337)
INTERCOPERATE DIVIDENDS

RECEIVED BY A DOMESTIC CORPORATION

a. From Domestic Corporaton Exempt


b. From a Foreign Corporation 30% NCIT
INTERCOPERATE DIVIDENDS

RECEIVED BY A RESIDENT FOREIGN CORPORATION

a. From a Domestic Corporation Exempt


b. From a Foreign Corporation
i. If from sources within 30% NCIT
ii. If from sources without
GR: Exempt
EXPN: 50% threshold
INTERCOPERATE DIVIDENDS

RECEIVED BY A NON-RESIDENT FOREIG CORPORATION

a. From a Domestic Corporation


Rule: Subject to 15% FCIT, provided:
i. The country in which the Corporation is domiciled allows a tax
credit against the tax due from the NRFC taxes deemed to have been
paid in the PH; or
ii. Such country does not impose tax on dividends.

Note: If the domicile country of NRFC does not allow tax credit, NRFC is
subject to 30% FCIT (as amended by RA 9337)
INTERCOPERATE DIVIDENDS

RECEIVED BY A NON-RESIDENT FOREIG CORPORATION

b. From a Foreign Corporation


i. Sources within 30% NCIT
ii. From sources without
GR: Exempt
EXPN: Same rule as when the Dividends is received by the
RFC from a foreign corporation.
INTERCOPERATE DIVIDENDS

1. UKCO, a foreign corporation, earned 70% of its total gross income from
its Philippine business during the years of 2009-2012. In 2013, UKCO paid
P100,000.00 dividends to UK Phil, a resident foreign Corp.

2. X Corporation, a foreign corporation, earned seventy percent (70%) of its


total gross income for the last 3 years from its Philippine Business.

3. Y Corporation, a foreign corporation operating 2 years, earned 51% of its


gross income from its froeign business.
INTERCOPERATE DIVIDENDS

CIR vs. Proctor and Gamble Philippines


INTERCOPERATE DIVIDENDS

SM Investment BIR Ruling DA-145-07 (March 8, 2007)


INCOME COVERED BY TAX
TREATIES

Mirant Operatoins Corp. vs CIR CTA EB No. 40 as affirmed by SC Mine


Resolution
INCOME COVERED BY TAX
TREATIES

Duetsche Bank AG Manila Branch vs. Commissioner of Internal


Revenue
INCOME COVERED BY TAX
TREATIES

ITAD RULING 102-02 [MAY 28, 2002]


THE END