Summary
RMC No. 84-2012 clarifies the tax treatment of interest income on loans that are not securitized, assigned or participated out.
Key points
- Interest received by banks. Interest received by banks from Top 20,000 Corporations, arising strictly from individual bank loans not securitized, assigned or participated out, remains subject to Creditable Withholding Tax (CWT) at 2%.
- Interest paid by banks. Interest paid by banks designated as Top 20,000 Corporations, arising strictly from such loans made to the banks, also remains subject to CWT at 2%.
- Debt securities. The 20% Final Withholding Tax and CWT under the Tax Code of 1997, as amended, and existing regulations cover interest arising from or paid out of debt securities.
Who is affected
- Banks receiving interest from Top 20,000 Corporations
- Banks designated as Top 20,000 Corporations paying interest on loans
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
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