BIR Ruling [DA-006-98]

January 15, 1998 BIR RULING [DA-006-98] AFC Fertilizer and Chemicals, Inc. 2/F Pioneer House, 108 Paseo de Roxas corner Legaspi St., Legaspi Village Makati City Attention: Ms. Emma M. Pagdilao Accounting Manager Gentlemen : This refers to your letter dated August 12, 1997 requesting for exemption from the payment of the withholding tax pursuant to Revenue Regulations No. 12-94, amending Revenue Regulations No. 6-85. It is represented that AFC Fertilizer and Chemicals, Inc. incurred net operating losses in the amount of P59,687,802.00 and P29,077,015.00, respectively during the calendar years ending December 31, 1995 and December 31, 1996. In reply, please be informed that Section 3 of Revenue Regulations No. 12-94, amending Section 4 of Revenue Regulations No. 6-85, otherwise known as the "Expanded Withholding Tax Regulations," provides that "SEC. 3. Section 4 of Revenue Regulations No. 6-85 is hereby amended to read as follows: Section 4. Exemption from Withholding. The withholding of tax prescribed in these regulations shall not apply to income payments in the following cases: xxx xxx xxx (d) In the case of a payee who suffered net operating losses during the immediately preceding two (2) years; xxx xxx xxx" Accordingly, this Office is of the opinion that AFC Fertilizer and Chemicals, Inc. is exempt from the payment of withholding tax under Section 3, Revenue Regulations No. 12-94, amending Section 4 of Revenue Regulations No. 6-85. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation the facts turned out to be different, then this ruling shall not apply and/or considered null an void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)