Phinma Property Holdings Corp.

January 8, 2008 BIR RULING [DA-001-08] RR 2-98; DA-578-2006 Phinma Property Holdings Corp. 4/F Phinma Plaza, Rockwell Center Makati City Attention: Mr. Stephen B. Sabularse Comptroller Gentlemen : This refers to your letter dated April 10, 2007 requesting for exemption from the provisions of Revenue Regulations No. 2-98, particularly the expanded/withholding tax by virtue of the Income Tax Holiday (ITH) granted by the Board of Investments. It is represented that Phinma Property Holdings Corporation is a real property developer habitually engaged in the business of developing and constructing affordable condominium units, specifically in Metro Manila; that its projects are duly registered with the Housing and Land Use Regulatory Board (HLURB); that presently, it has an ongoing project called San Benissa Garden Villas Project located at Commonwealth, Quezon City; that it is also a BOI-registered corporation under Certificate of Registration No. 2007-056; and that pursuant to the said Certificate of Registration, it is entitled to ITH, to wit: "6. The firm shall be entitled to the following incentives: a. Income Tax Holiday (ITH) for a period of Four (4) years from date of registration. The ITH shall be limited only to the revenue generated from this registered activity (San Benissa Garden Villas Commonwealth, Quezon City). "In the availment of ITH, the firm shall secure endorsement/certification from the HLURB that it has faithfully complied with the approved development plan." TSHIDa Date of filing: An application shall be filed with the BOI Incentives Department within one (1) month from the filing of the final ITR with the BIR in order to validate claim for income tax exemption. The application shall be accompanied by a certification by SSS that the firm is in good standing in the remittance of SSS contributions of its employees. Any request for extension of the reckoning date of ITH availment shall be filed prior to the scheduled date or within 90 days from the occurrence of fortuitous events and/or government delays." In reply, please be informed that Section 2.57.5 (B) (2) of Revenue Regulations (RR) No. 2-98, as last amended by RR 30-2003, implementing Section 57 (B) of the Tax Code of 1997, as amended by Republic Act (RA) No. 9337, provides that the withholding tax prescribed in the said regulations shall not apply to income payments to persons enjoying exemption from income tax pursuant to the provisions of RA No. 7916 and the Omnibus Investments Code of 1987. Considering therefore, that Phinma Property Holdings Corporation is a BOI-registered enterprise enjoying ITH for a period of four (4) years reckoned pursuant to the provisions of Section 39 (a) (1) of Executive Order No. 226, i.e., from February 2007 or actual start of commercial operations, whichever is earlier, but in no case earlier than the date of registration, this Office is of the opinion as it hereby holds that it is exempt from the payment of creditable withholding tax prescribed in RR No. 2-98, as last amended by RR No. 30-2003 on income payments received by it during the availment period of ITH, in connection with its registered activity. (BIR Ruling No. DA-578-2006 dated September 22, 2006) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cDCIHT Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service