BIR Ruling [DA-016-99]

January 11, 1999 BIR RULING [DA-016-99] C & E Corporation Meralco Avenue corner General Araneta Street Pasig City Attention: Ms . Perlita T . Dela Cruz Finance/Acctg. Supervisor Gentlemen : This refers to your letter dated November 17, 1998 requesting for a ruling as to whether or not income payments made to C & E Corporation are exempt from the creditable withholding tax imposed under Revenue Regulations No. 2-98. aisadc It is represented that C & E Corporation is a corporation organized and existing under the laws of the Philippines; that it is registered with the Board of Investments (BOI) as a New Service Exporter in the Fields of Design and Construction of Industrial Plants on a pioneer status with Registration No. 96-168 dated August 09, 1996 pursuant to Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987; and that under the terms of registration, it is entitled to an income tax holiday of six (6) years from August 1996 or from the date of actual start of commercial operation, whichever comes first but not earlier than the date of registration. In reply, please be informed that Section 2.57.3(II)(2) of Revenue Regulations No. 2-98 provides that income payments to "corporation registered with the Board of Investments and enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investment Code of 1987" shall be exempt from the creditable withholding tax. Such being the case, and since as represented C & E Corporation is registered with the BOI as a New Service Exporter enjoying an income tax holiday for six (6) years from August 1996, income payments to C & E Corporation shall be exempt from the creditable withholding tax under Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997. (BIR Ruling No. 057-95 dated March 16, 1995). 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)