BIR Ruling

July 12, 1972 Messrs. Ozaeta, Ozaeta, Romulo & De Leon 6764 Ayala Avenue, Makati, Rizal Gentlemen : This refers to your letter dated June 23, 1972 requesting a ruling as to whether or not your client Pacific Equipment Corporation (hereinafter referred to as PECORP) and Philippine Engineering and Construction Corporation (hereinafter referred to as PECCO) be allowed to register their books of accounts as a joint venture; to file a consolidated income tax return as such; and that the dividends to be received by PECORP and PECCO from the joint venture is subject to tax on only 25% thereof. It is represented that PECORP and PECCO both domestic corporations are engaged in the construction business; that they have been awarded a contract by Marinduque Mining and Industrial Corporation for the construction of a dam and reservoir in its Surigao nickle project; and that the project will be done by PECORP and PECCO under & joint venture arrangement. In reply thereto, I have the honor to inform you that the PECORP and PECCO can register their books of accounts as a joint venture and file a consolidated income tax return as such for income earned in the project. The dividends to be received by PECORP and PECCO from the joint venture is subject to tax on only 25% thereof under Section 29(c) of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue