CTA Case No. 2580

DECISION —

cTa case No. QB 25S¢ Fetitianer an IGd, aca rued in Rts bagks POB,98O.75, representing interest incame payable to its foreign creditor the Barbet, Ltd, Tt was oanly a year later, or on 18466, that petitioner was able to remit the FPOA,SSO.73 as ankberesh payment ta Barbet, Ltd. because of Central Pank restrictions (t.6en.-, June 9, 1986, pp. 12 and "@) and anly Lpon that remittance did petitioner withheld the BOK withholding tax amounting toa Pee Ssod.oo, (Enhe. H and W).

In 1966, pebitianer acerued an its books the amounts af Fié6é,686.21, FE1LO,2LS.98, FLO ,OR4, 6&2 and FP24,820.24, or a total of FP9YSI,649,92 che and payable to Barbet, Ltd., F Wheeler Ltd., and Siemens Sehviechertiverke., Tt was not able to remit thie tatal int eeagh adnecane abroad because of Central Bank restrictions (par. 4, Fetitions h.aseMe, Jtne 9, T9846, p. 2A) and. therefore, did net withheld the 20% withhalding tax due therean at the time of accrual. Only upon actual remittance did petitioner withheld the 30% withholding tax amaunking to FPSS8,495 00, The only issue to be decided in this case is whether cr reat petitioner eheoudd PAY the 173

DECISION -

cra case nv. GB asco withholding taxes due ons such obligations actual remittance and not upon accrual because of restrictions of the Central Bank.

quote: ane C how, oe tale VUR The lone question tendered resolutian is whether or nat Obligation ta withheld and pay income at-source on the rayalties ais upan acerual of the royalties oar upon actual remittance or payment thereof.

Fetitioner maintains that there no Obligation to deduct, withhold, and the withholding tax ain i972 since royalties cauld mot be remitted due Central Bank restrictians. In submitting, however, that the liability to withhold and pay the income tax withheld at source from royalty payments to a non-resident foreign corparatian, like Rayer Sktiengesellachaft, Leverkusen Hayermerk, is at the time of the accrual of royalties and not at the time of actual remittance or payment thereof, respondent relies mainly on Bureau clated Internal Revenue Ruling Wo. Yieoos, February 26, 1971, the pertinent portians of which are quoted as followss "This refers to your letter dated February 14, 1971 requesting ai ruling as to the basis af the withhalding tax due on film rentals or royalties Payable by you to non-resident foreign film corporations.

n x M oy "In your letter, you cantended that the ea) withholding tax shoauld he based only an actually remittable amount woder Central Bank regulations and not an the entire amount due and payable to the non-resident foreiaqn corporation.

174 We pon thereof BMG fh /79 DECISION ~- ;

CTA CASE NO. gh 2550 This man kent ian hy hk Loy Withholding bas 1s dependeank oom remittance af incense payati bes fev thse elaine a resicept Sedan coarporakiarn burt on acerual thereat. Such heing the case, although a portion af the ACT E (Vie ho hhie ner residert foreiton corporation cannot be remitbed on account of Central Bank re "iehion, the tax due oan aid ehicy phouled be decdiic’ and withheld as aif there is no restriction.

rics Wy cu the transfer af funds fram Blorway a Denmark , the Netherland , Bele tum, Luxembourg are Foy AGC the tax should he ai thheldd an the Same Marner AK if no custodian accaunhe, thes name of the foreian hank ore oth foreian persan should be entered cm the ounerahip Ce and oan amended owrieirs " the bute) oo qener ‘I¢ ‘ (CCH, Lest? Vol. 5 a Pear?

AES. 409) 38% withholding have eheutd he deducted arc tai thhe dct ey the entire amount of film rentals ar royalhies payabte ta the nman- resident foreign film

DECISION ~

CTA CASE NO. am 2D SO whach. or aero curr of Bank re be remaitt trac tac: , eqdooabiaad," cannat AR opines ely & ted Therein, Bureau oof Internal Raver riupbedct withhaledang has Ls reat (hopencden tk remithance of the tocoaome payeble tea noneresidenk foreign cormporabior tot ane lauding thrah Thies thier oy hhye Cy acerual bkhereat. And ae taut, ald thea the income ¢ of Central & ariryeat, robs og be remitted wietiong, the tax theregan shouwid be deducted and withheld Lf there is mo restriction.

The statutbe anvoadl ved iS 6S if ied BaCby Ce of the MNatronal fTnternal as follows * Morr esi cent Loans. o In the foreian carporakians toa tax under this Title, nat engaged ain trade or husine within the Pha lappines there: eshyar dy dre bed ed wikhbheld ak the source dn the ea 3, “ner paricrer anct upar the same ihems AAS is pravided in Subsectian (bb) (1) of this ec hion, Mx No , A tA equal to SS per cent thereaf. This shall obe returned and paid the game manner and subject to the game conditions as pray i cect Ln Section B4, “ho eu ow an account chiie?

Ath cok Leng Te VIBTILLE the canatrolling provisions af which And Gecthion S2Ck L of the same Code pertinently preavide (hb) Meron f AL - Every individual, corporation, partner ship, or association, in whatever 176

DECISION —

CTA CASE NO. gm 2550 Car ity ac hin. aincduding aM leseree or martqagar of real oar preaperty, trus o ao ting in trust tniby., @ecutar, adminis tratar , dver, carne vator , fiduciary, employer, and every officer or employe of the Government of the Republic of the 3 having the cantral, cue body « Cigpogal, oye aft interest dividends, oa Lar Les .

: PremiumMns.. Annu hies , Campeneahicrt. PEMUD erations , emoluments, on oather fixed oar determinable annual, peviodical, cor cagiteal CLEL CIE & peafi te, arred incowe, and capital gains, of any noneresice alien not engaged in trade cue business within the Fhilippines, ghall f(excenk ain the CASE meray iced in ssutby chian (adv th) of this Section) deduct and withhold fram the annual, periodical, ar casa lh Vals « profits, and auancame, and capital CALM 5 a TAH ecyura | ha AY, thereof.

pravigiong, hy the way, were merely dimparcked amd caniec from similar withholding t : naa Grover Code CSeobhioan (b)]. Aceardinghy. an confonance with settled rule of ebtakutoary coustructior. the anterpretation they have received in the United Stahes have euthoritatiwe effeack ain hie opreaper canstructian and interpretation of our law.

sto verbatim Thus. AS rorrechily noted Iny petitioner and which i8 mot disputed by respondent:

177

DECISION —

cta case no. SP 250° cae

i. Tm grravaing eat Bib Parbina Heo. Fie WS, Gated February 2S, £97, our Bur a of Intern#l Revenue quoted 2 autbhord ty the excerpt af a United State Interna Revenue Service ruling which is found at par, 4IB7E.408 af CCH, 1969, Volume 3, ft. APPe ares t hist thie: tid U.S. rudaing Ute actually Himeoqraph Ruling fo. 3 Was Lssued ly the OF Fa Coma Orpen of foterrryad E Washingtan D.C., arm dedly ©, @e1O arse be found at the Cumuleatbaee Beri berkan pf wa ah prac Lai.

i Sy wibraech Oven ew The said Mimeoagraph Pubing Ho. SO75 has heen “Ee t Stake drm ites Internal cog hated Turi oe evident that im a: dhs ETF Rulang Neo. 7Fi-OOS an February oS, Fi, eu OW Bureau af Internal Revenue relied on a Undted Stakes Internal Service radang that has alr overruled, the same having heen oheolete af June, LOero, Nev, mloun Blo.

* Flowing the decis. caf United States District Courk ain LD.

ad Stak 1146 fF. Sum op . an MNoavemb i?, Lip es ta the that Carp 2OWy whieh hele Licenses, wurvelear patents avyirivedcd fay ryarye resident aliens whe as a result art blocking proclamation were forbidden right ta receive ar cigna af royadties was not haund ta ee thhole oF royalties, the L reed an the Uirnia keel i the abligatian ta withhald and pay the tax is upon payment or remittance af the income ta a non-resident alien.

Mae cy In the (1.0, Caulk Co. cage, where the factual setting, daw invalved and issue 178

DECISION -

- CTA CASE NO. GP esosc litiqated are qt ahd fers Delaw. «¢ corporation, helel Ticenrime patents owned by twa non-resident aliens, Robert Doge and Emmanuel cde Trey. Roth were Set Under the licensing agreements, plaintiff oflioated ibkeelf to pay rayalties toa Daqe ancl cde Trey. In ats treatment f the twoack ef royalti on its operabions, plaintiff, adhering ta the accrual method af accounting, entered net royalta and withheld as accrued s Of AS4) ame L942, the periods Lovolvec an the cage. Thos, 294) and 194% accaunts pavahble or plaintiff's AE cf ¢ i.

com books ane eost af Going busine Fc Mo waibhbhoieding rehurne ; e#liene Doge: end cle Tray LOGkh oor Lea, Whid Le mace by obiff curing the years A941 ancl A942, the anquiry shifted from "when the rekurnm due" be wher. df ato oall, anbath required hey waththaled cam the The "whee oof the mather, noe : ere bdier Cuba preg ariel irieguary thing proc ;

of royalties due them under coamtract wikh corporat ier whieh hele ti otherwise, the queshion = withhold the te from th AC al ariel royalbies ELV CLSKE "RUG: al thoweh royal tig were oacervecd to the glainkbaff os books ain I94hL and AGS! as liakil y to the noneresiderrk licensors, the same caomlid mat be paid or remitted to the Jlatter ag a result of a blacking proclamation, med Phe opecrid oof Leper a) be wher thak valicer ey Mout wide cet beboachasg 179

DECISION —

cTA case no. @MBR 255° proclamation. nore res Lider t a) Ler Were forbidden right to receive or dis royadbties ochuec Cbs cieiclepe core bar corporations eiieds hue decd Licey: Ges “gains, :

internal ¥ ehatiute persons having canterad, rec sea] or paryamesry b ermingile annual op cea te praftks, arehl tiecome oP prpe alien ta withhotad tar are. threy necessity of failing withholding hax CoG > crf wericdesy tics ry income" within aid devolved on corporation while corporation tained blotted royalbhies, The re remittance af the Unit income to t hie nor ' . i} 2 UPC Vay Mery t fore wiht ade that the obligation bo withhold not cantratling effects, on the pregent case, we will quete ab leanati from decision.

"The onus of the withholding reg iremen t cn Phaainkairt 1 impogect by 5 L42¢b) . LR. s "ALL Per sans .« kn wha hey er capacity acting, #* * *« having the conmtroal, rece tpt, goretocdy . disposal, oo paeymerh of & KF fixed oor ce “inable annual oor periLodice Qains, profita, ard income & * Kk of any non-resident alien ¥ * * shall cdeduct ane withhotle from aoc h euncue | or periadica. CHALLIS » profits, arid income a tax % &# RK," Gn the whole. this provision does mot concern itself with "where" the withholding abode place, shall odo “what”. Hesvsea ye ers ‘ mich dliaht at does shed. The duty toa ai tithald existence af 180 the DECISION

CTA CASE

s.. QR 2s s0 periadical CHALONS y prafite incane”. The ection dir withholding frem such sume as are and oaincome" oof the nmarcesider 5 arid alien. Obviously, aif there are ric such "ALIS y pref t and Lnocome the cdiubty 9 withhold ney Go the obbecr hand, if : ung oe att labl Tariqyiesc in hocormm dau the pakhb dys ec ididdave “when! slain cuit aucoeree, {ode mot cree) ny clecisiean on amy subtlety of cone tructicr, but To ode advert, ast faeh, to al. prafithe, ariel Lica to the aelaers Doge ariel che Preoy whade thre Lire upon eA Mix ;

meatier carmtrol alien bhicem Lanclesr to thank met Lr oroc Lan y e@loment af furds fram the hace fuged Le cot gre qe ur rec wha ler tlie, pepes etidd otn pladnhati’s earmce the lderernka to individual national f Preard thy ses raigqhk oto calbent i a but Lye ye? forkriceers right om) receive them or di: @ oof them. Ho ecananic advantacdce wes theirs. Such a hoetliow “right cdees nok have the core ‘crt benefit sufficient ko caneghituke "“qains, profits, and incame". Een thie ubiqud tous dac hr irne cf CLOy 18.

DECISION ~

cTa case no. GB 259° deue biewes precede b ae bryercines : home Pl’ ray flee (DOR), Tali. ag an Incuestraiad Trung t re Ve at page Oa) "Threouchoauk the Reverie (aves bhe words GAIAM, profit, or inceme mean am actual, nat foohititous aqain or prafit ¥ eK ee," Certaderdy. the WEE not “ineame”" and, if "Vepaime, ar prafit', Wee) uprend Lise auyed Fiohty artificial. Pu bbiep yg the B Lepr es vere? vara) rey [CUAL ER FO ke cammand payment to bhemselves or wolike tt damage oof the moupoamie in bedlyerincd v. va Penne Leh “The power hoa dispose of Lneane is the equivalent of osnership of at." Tt would seem, then, there being no "qados, prafits, ar dreame’ of the aliens ab leask during 1 holmes plainsblart 1 A Are thea blocked royalties, ma withholding duty devolved on plaintiff and no 7 f j | heres pre ptecd, whide the rey amount of F&o.s im the books to Bayer) canid nat be remitted to Ba due to Central Rank reste debieon atk ot hime, would mato create "qoains. prafilts abby oan “200 Calthounh was get this backereapy bhe situakion s Of pelitioner sas - Jiability incame” be nero resachen tt Pore tary mer pre derived by THayer; hence 1 there was o income subject ta withholecdina af tan-at SOUP CE . Accordingly, petitioner had duty to withhold and pay the tax.

18:

DECISION ~-

cTA case no. GMB 25 S° Elvcars CITE? adorn ter decision of the Uniked United States Tax Cache Prom ehaeh tian SAch) af cour Mahierad Piberial ‘ Code wae prackicall, ceapterdd. and derived from tly merfd tabiered ome omer Faeveruie earch Comedia, wbiicty rime des duty ooaf wikthheidane artines pa We quate fran LD.

ae time oof u fe alte is trac ent & J42(t), orn care are d hack to the feb of and & of that : wer barerit . Paragraph 0 * # wll persans KF Yang bhhe canmkreead, ebpt, Chapoge bh, ca pecsmar boop adh I : F profes. arch ancame oof another persan subject to bean, shaldooin behalf of such peraon deduct and withhoatd from the payment oem ameunt eeprivalant to the nara or ae, Se ae Perr cecpecagha Tar P byes saree Merk an bs ¥. havdnme ihe: contral, receipt. cus toady » chs pac payment oof * * at her determinable aria) profite, and dneame cf person, exceeding AO foe ary taxable Yee ¥ ¥. ce whic ale: required toa make and vender a retour dn behaif of anather, as provided herein, * * # are hereby autbhoriced and required ta deduct aricl withhoadle fram such annual qetins, profits, and imeone sich gL, 8S Will be sufficdent ka pay the normal tax # * ££ and they are each herehy marches personally Jiatle fer such tax." ”

Cpe a darcy OF - 18d

DECISION -

CTA case NO. Gp 259° withholding Press thie Teey mers t” while thes Comper Lory sec tian autho sh tebyes decduc ber and withholding aaent. Lik Fee mcr, to the House of Pepir have on the Hall. the Committee ey Wey: exrych 0 Pee cid, "Probab Joy twee tha of tofyes Qa ears a fae Cop Crg ex her tprbiedcta, f3 wear del be checker bec are wiaitibhedd at the SOUS of the ancome and paid ain ful} oboe the Government. x * Ry this method the amount af tay due oor ote becomes cue rmpeni every os es be ve 3 can tle beat rreads be aria | dpe) tm rst hiybye deh aah yeaded obey khigs ; bes fie Lye drveoenes reache Ou PCH re Sb o dent citirvens vies .

sysbem, withholding tn the parade ach DD i eee tian Cedi under b hye eLqgni fie ar heecdarng "Re turris’. Cy e aA cig bect . We ae baer thy ounce oes cg emeayy be and fy GE, Ad wniniekhrakion” .

By the Revenue Act af L9l7, paracdraph 8(d) of the (916 (par. ODO of the AFIS Ack) ary "“withhabding at oP Rie bax due oan or incomes of Ldent Jersans”, Information at the ae VIA slike t tted., Accord ang to the Heise sf this chande was made for "a more effective administration of the law" and the avngd of anrmayance 184

DECISION ~—

CTA CASE NO. Gi 2589 withholding acqentes : Act, paraaraph ? (by of Lhe Lets amended boo Limit witb being ak the seoorce te mene feleqik a@liems. The met further ine diced interedk fram meee Foe venank bonds ag a subject of wathholdindg.

The Ttevericve eet SFE mete mo an th per tinerst language af bhe amencdecdt & 9h) but dacl anmcres the waibihele arses rate and verumbered Lhe chins Howrersverpe, bhaa Mepearek omt othaeh Pleas (eum if bere od on "Col dec tic at th : "The puceapes do obaidd, under exigetang Jaw, requir ont doy the wdthhotdinad of ameoame ain thee of peymernte: tee dinhivtduadles, choy puvet ge erp ys 2 oe fixed end chet maitretyle e¢arittad oy per Lacie ad, (FATNESS prafils, arc Lncomes be noresd cert. el tern mcr picue at & daterrt 3 ary amdice hep t of (ese Wha SS ay an hare D oof bhe . arid Was ‘€ doin & 8 bhi of tlhe LOL7 Ac t when the former provider WAS yen pve a | hey co hrarvaye? WAS intended wher thie delimited to app boy only he payment was the time when the withholding duty aras Go opervnee ship Vhe erie Ack of 4 mearcley sine ncmern ts ke the: Oe Lor tinenk toe aingeuiry, mor did the of (o24, However, hath the House Report and the Senate »s DECISION CTA CASE NO. GB 25 5° pay ner Foogerh oar commer tz Sec hk Lar . Vision (a) of tk stion af the present Law Pere be withhobleding of a tax, cm fiseed ar deterniiab de dnecomes madct La én roe: idenbk adaenm anedavichtal., cr & pear tr hip composed in whale ar in pany t of nonresident "reading bhe eithboalding of te from paymentea" bo a partnership.

aes Fates of withholdane WE PES Aner ee Goby the Beverniuie Ack af 496. and the Conference: Mepor & of the Committe of othe Howes eric mate refers to the effect oF high oan rayhercs "Tha requaces the withhalad- arn rer af add peyigent of Ancone fore ther erie ef Rie Wed ote formier carpe b hye: Pree cS mak dna 4 € theel mo motsaee thack Shion .necame ix owentle koe the withholding pect to payments made batara thre: anactmont of this Aaks pn, a Sithoudh refere ; hea foredan carporationg, the withholdang on indiavacdued i timer, Egy ern dara da Tn the Revenue Gok af GSR a wholes: sparcure was made fram the of prior : came 8 144, tn ing on part Cadooef the: hath Live Rieter Ppa prea & arved te bvee 186

DECISION —

cTa case no. GMB 2550 mf CS erie wikis paid tra withhboaldana ak Cc po oat samcds.

cenk of the anbkeregt rior € Uryederye three Pree. pees 1: eae thie rat Wied poe Without at: ing | hes ther provision wire v3 chr pepe ss bee oa have Lary (oe Anqudry., bal aged de the House Re por ¢ aryed an Serva te Report references to withhaledinag af tar Cry interes! Ob liqekions wice re couched itn of payment.

Rie b ochich orrext the opm Howie . cammer bt br Fespar t coy folie Ihe:

nery ks 3 Mey ta eeabbidve lado oak bbe seece: cuveteer section 4s fram pevemibke to an individual aC hha ll[lUhe lO “withboletma itm flee CF poe mien t to foreiloan carporationgs"”.

The Report. which the Senate aon the Fevenue shating with reference ta a change i 8 @liCais "There wild tyes withheld from the amounts ceivable by a nonresident alien Elis aeme cay bss reqiud rec Ley hres witijheda unedeaw “ohio LAS ak the presemnbk dea”, “be@cedvaktee of 187 DECISION — _..

CTA CASE NO. QB 255° descriontive of martites ' ors oof bam fico bhiee fPairah momento oof acaria ld be topper Lacs tb second before recelpoh af payment.

The House Report on the Revenue fet of T9368 appears to Ie ov tenwerct a deviation. In referring to cansent dividends, the Committee on Waye and Heans reper hoc "Try oc ats head dence ies pene cot mo osiutbjeck ke the prow i siores sek dens V420h) are egal Py 144, retabing te bhe deduction and withholding of ; an the OULU & a Ric Sebtebhy Eo: rrepuadieeses thak euch con fader bey bbyes cerpored doar vw: a ort shady eciad he. Vive amen th owhibety bbe corporahion wtosua dct fy cys been requirad boa deduct and withhotle thie amour t speci fied att such cansent had heen gharehald@er, cr corporakian, an ¢ tlividend," T Fics ter such ay of Mey pertinent commas & ye 85 found ain the on 1941 and IUS4e, 2 ary nd Horner, ocr Proc tbe commit tee report. ret current thairkarnca. The : Report oon the Revenue Ach of Lhe in referring ke a pro 40S ——_ DECISION — .

CTA CASE NO. gg 25 6° withholding effec were ene t.

A) CN ED FT

eel ong! Pisbra ded oa vt ony bare mee b et Fa dividend shald tak SP required to deduck and withhold # tris tinder this sechion tment such paymentk", tired tea compebesy:

Pleepur das t Cerys bh Meneses pore bre fesprenyqais wes pier ymerge andiewbting the cryghatlligabian of the withholding duly. Treasury Feu de WTS A ae 6 “VCer) at “Wlakhholdirg of a han of arial or ad to @& monresacd abies deplivicueal ¥ F FN, tT her goce fee meric SS hoo owl tibheated ina Lapory payment, ech as "The bax mush he wi “hheld tlw ose ce fi com three grove amaunk oof any dis thruk bows mace by oa carporabhionm’ Cae. ida Lys °F *€ ko arn arirmtab rebturn k K€ shows ere the acmcuany © cot tae required bo fe wi thie dad ran each sorresicbermt alien &£ b+ moowhy did daceame other Uher debereet vw pede during the previoug taxable year" (29,14 3-743 "Tay maibhheld at the gsaurce upon £ # F income paid nore ei fiduciaries * Fe" poo boobed lay mrrpbe to oanariclarnt aw “dori ad dices pe vk yleke with a ‘ alien a é a eid evens an khe cue a hyo dc hig ak the rake btoak the bine paymentkes ve ce our ruled tha decisions:

the Ura beret hole praemetny & RUT cle 189 crate in effect at the Cims payments Sdam oof whe these “ny ak

DECISION ~

CTA CASE NO. QE 255° 4 ELLE whe these withholding ehemid be at La ett ah Lhe bile wit WIG eR ne) re bhhe orate when Prey mers were actually made, the Bureau has ruled the hime of payment gaverns the rate, O.D., 167, J CB. Lo tebe L973 2,7. AG LOG. TL7. Pty ASF

o. Lae : 2 of PL to thes mech bem vias emp doayecd dm GLO. Paes, Fe mk, TE fmeela f bevel cua erties cre mecrpefes GLCP. CAG a, pom | Ch, "f ¥ # watibedel ing is required uber #4 hoc cene Le paid to a none at Ue rate am forme mh the tain Of pecymerbk."

"ry thie q Lao.

Lae;

Tr grb des breepact f« tebe, ocd deery atadl Me ir Che sbereve. nce uber Facifaic Radlroaacd Uo, vw. OTR. , 21 B.VLA, SPICY held rake of withhoaldined was thy toh effechive oon the date payment, Tr that petitioning coum WN BU furl ly ‘fcue similar to bhe enie: fiepes Ee Ga 4 Srssmern kt, Tierra hie esc yaacyarb des chug dane ; =:

: ther hoee ceded he ealacig bh gf war reshtrichioans, Ct in fact, paicd am LOR. ane e onfber the withhaldang reales hiearcd JEM Loe recssercl . Thre cecoriearey 0 areuvercd the former, hepuiere orgy : sehicicy Let appiy — t et therm chases tla bh yee wot, fficdenk furde were avadleable at all times for its payment ; anid thee date af construc tive tok try the 190

DECISION -

cTa case no. SR 25°50 bondhviders gave rice koa khe duty of withhaldinad. Tho Board of Pax Appeale rejeckecd the EC CULM E: seydird, @1 F.T.A. ah peeve and F944: "The pre bt bere not cod were mak eoal led et overt id f pease itched yt eedademis: chaed oo prare was aetually paid to arc by Ebie benichordeter ae ancome bi the ek Eye oo bee saboc mela aha d rea k iver myer thicary 30) were aumotsr tf chabe fee pen much thereafi ae ly bye te withhold and ¢ et of the tbime of naymern th oa the matureatian mot cf thie withholding duty, prayers | beard both an yeh of obitec:

rhe yuuairmerd Ohl ique nm ota adoption ! oo gamved ok mae thie praper amounh chian oof Ww : :

use nok to apply ta of the United States (Caulk SLIEMA » Toye Pharmaceuticals, sibwated? fy Law, whtety cs Layee bees Pere thre orubang “ec@ral foueb an De Pea YT simidariy : Ls af neat similar boo owur daw, reasan and dJagic ais neat te be simply hr us hect aside ta accammadate ai ruling of our can Flireau of Internal FPevenue ebhteh meredse cqinked as authority the xeerpe oof a United Ste Internal Revenue rubing bub which excerpt has heen declared ohsale’ Abboof the 1.0, Caudk dorcigian, : we view Ubis Jeqadl pere@lstem, wer fire ore te by the same 191 wy

DECISION -—

cTa CASE No. @HR20 "CO and velid oreacon ko modify. much depart fran te canmelusion reached ar quake Mindi af othe Lina beel nhes Cena bk there, and the same shearich resolve the identical a6s.te mow broughk before we in this proaceedina. Wes oo caariphint boymere bac webl-sethied my trae apes eye moony a Vhiak on er cay pe ames Hye Lea a Fiealdy Caypamc! fr afoothe Uraterc F bes interpreta kibord bh bua authoritative eff caretrauctteur tay oa on a ot an byes pe Career reebavemy, omf eur tar, ok Payee oa bbe) dd tiie REM LE parame be tary tnbevdied un ee tay er ctr Pleat despa Try berniead Revenue Code ohaieh, merely imported ane pec adbmea ver he fram Section TdaSthd) of the Uns ted Stat Tax Cade during canclueian followed hy froocuced ready, t hy owhaoh :

Revenue Seryaice Che Lime oof payoont Qf the withhodldimea duty - should gavern Mert ay dre report af Lie nyothing 2s ¢ 4 Ce £5 1.6 roy edd Ae aeouryy & Wee nok read Cesd bay Be YT reatrictions.” (Exh. UA Each. : 20, EQR secarcs Sinem the rayaltias coaudted mob he remitted ta Mayer due tea respanden t hinge lf an ha decisiean aphealed From. eure Ly a reapondeant ~s counsel shetdld mab expect petitioner tm make efforke, alhberk unlawful, to remit ve Cdemieer Euank fe 192

DECISION -

CTA case no. GMMR 255° the same. Hoc ay or endent os porimt binat tS the Iyercd 0 brereery vehi tianer’ acy bk: & the Ane cumnes bec ame withholdiray a remittan effermted Jaker, suffiee tb Caudk, did nmt aimewsrrt be Sepak, pyri a bon ® !

and income” oon the park of peonere Rayer and. there fore. Me Pree witthhald tax devolved on petadbimoner We, accordinady, rude bbiet roy alties in queetian coutd yea t remitted int .

Flharmaceutlical sy ta reap ody foreian cor pon ect ten Faeeyer AK bLena schalft, :

Central Bank re due Ste de thear pehithioner under na obligation ta withhold and 3 income tercak . Cay royaltie and, therefare, at ae mor for the deficiency waithhalecanag abe scr ce ASsesament of r Loren crf Internal Fe:

se pomecdernt lomma , tt <

WHEREFORE, We are of the opinion and so hold that petitioner is not liable for the deficiency withholding tex at source for 1965 and 1966 in the amount of P49,995.92 and F149,557.44, respectively.

Without pronouncement as to costs.

se

DECISION —

CTA CASE NO. @R 29 5°

WE CONCUF:

4 T_LER Taeclepe:

» REYES Jrudae AMANTE.

EX Zz.

Assoc Lake reached after dite consultation the Court of Tas Oypipyes eed es Section 13. Grae de ViPto oof Gouge & 194 amo Che members cf an eeordadpee: lwa ths pee tatu ten, ANANTE Presiding of Tax dpegdeas