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10 Da 596 06 PDF
10 Da 596 06 PDF
Gentlemen :
This refers to your letter dated May 2, 2006 requesting for a ruling on the tax
consequences of the Service Agreement entered into by and between Marubeni
Corporation (MC) and Marubeni Philippines Corporation (MPC).
It is represented that MC is a corporation duly organized and existing under the
laws of Japan with principal business address at 4-2 Ohtemachi 1-Chome, Chiyoda-ku,
Tokyo, Japan; that MC is licensed to do business in the Philippines through its
Philippine branch, Marubeni Corporation — Manila Branch (MC-Manila) duly registered
with the Securities and Exchange Commission (SEC); that MPC is a corporation duly
organized and existing under and by virtue of the laws of the Philippines with registered
o ce and principal place of business at 8th and 9th Floors, L.V. Locsin Bldg. Ayala
Avenue corner Makati Avenue, Makati City; that MPC is a 100% subsidiary of MC; that
pursuant to the intra-group services (IGS) charge policy between MC and its domestic
and foreign subsidiaries, MC and MPC entered into a Service Agreement dated April 1,
2005 whereby MC's Corporate Staff Division shall perform services in favor of MPC,
consisting in:
1. Information and advice with respect to general administration, human
resources, media relations & advertisement, accounting, finance, risk
management and information with respect to legal matters and
economic & industrial research;
2. Services with respect to payroll and welfare for Japanese expatriates;
3. Advice and assistance with regard to certain information peculiar to each
country by Regional Strategy & Coordination Department of MC.
It is further represented that for all the abovementioned services which will be
performed by MC outside the Philippines, MPC shall pay MC compensation for services
to be semi-annually agreed in writing by the parties based on agreed allocation ratios
without additional mark-up or pro t; that such compensation for services determined
to be on arm's-length basis, represents allocation or reimbursement of actual costs by
MC to MPC based on actual costs and expenses incurred by staff of MC in providing
the service to MPC; and that MC-Manila Branch has no participation in the Service
Agreement between MC and MPC. DcTAIH