RMC No. 84-2012 — Clarifies the tax treatment of interest income earnings on loans that are not securitized, assigned or participated out

T BUREAUOF INTERNA REPUBLIC OF THE PHILIPPINES DERARTMENTIOEI HINANCE L REVENUE 4 44 RECOPTE MGT DYVISION BUREAU OF INTERNAL REVENUE RECEIVED t{ 2 t 2012}+ 48 *AM. Wr

December 21. 2012 KENUE

REVENUE MEMORANDUM CIRCULAR NO. 84 -2012

SUBJECT Clarifying Tax Treatment of Interest Income Earnings on Loans that

are Not Securitized, Assigned or Participated Out

TO All Internal Revenue Officers and Other Concerned

the proper tax treatment of interest income earnings on loans that are not securitized, assigned or participated out. For the information and guidance of all concerned, this Circular is being issued to clarify

Regulations No. 2-98, as amended) (20,000) Corporations strictiy arising from individual loans obtained from banks that are not (CWT) at the rate of two percent (2%). Corollarily, interest income paid by banks designated as Top Twenty Thousand (20,000) Corporations strictly arising from loans made to such banks that are not securitized or participated out remains to be subject to CWT at the rate of two percent securitized, assigned or participated out remains to be subject to Creditable Withhofding Tax (2%}. (Section 57[B] of the Tax Code, as amended, in relation to Section 2.57.2[M] of Revenue Interest income received by banks from payors belonging to the Top Twenty Thousand

interest arising from or paid out of debt securities. (Sections 24B][1], 25{A][2], 27{D][1], and 28{A][7][a] of the Tax Code, as amended, in relation to 2.57.1 of Revenue Regulations No. 2-98, as amended; Section 57{B} of the Tax Code, as amended, in relation to Section 2.57.2{Y] of Revenue Reaulations No. 2-98, as amended). (CW7) imposed under the Tax Code of 1997, as amended, and existing regulations cover The twenty percent (20%) Final Withholding Tax (FWT) and Creditable Withhofding Tax

modified accordingly. All other issuances including rulings inconsistent herewith are hereby revoked or

All revenue officers and empioyees are hereby enjoined to give this Circuiar as wide a publicity as possible.

This Circular takes effect immediately.

Commissiorer of internal Revenue KIM S INTO-HENARES

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