BIR Ruling [DA-019-98]

January 28, 1998 BIR RULING [DA-019-98] Joaquin Cunanan & Co. 14th Floor, Multinational Bancorporation Centre 6805 Ayala Avenue, Makati City Attention: Mr. George J. Lavadia Principal, Tax and Corporate Services Gentlemen : This refers to your letter dated October 17, 1997 requesting for an authority on behalf of your client, Fil-Cartoons, Inc. (FCI) to apply its Tax Credit Certificate (TCC) No. 002270 issued on March 21, 1996 for the payment of its withholding tax liabilities. It is represented that your client, Fil-Cartoons, Inc. (FCI) is a domestic corporation registered with the Securities and Exchange Commission (SEC) and with the Board of Investments (BOI); that as an exporter, it secured a TCC (instead of cash) as refund of its unused input taxes pursuant to Section 106 (a) of the Tax Code, as amended; and that considering that TCC may generally be used for the payment of the internal revenue tax liabilities of a taxpayer, it is your opinion that said TCC can be used for the payment of taxes due from your client, including withholding tax. SHTaID In reply, please be informed that paragraph III (B) of Revenue Memorandum Order No. 20-91 dated June 10, 1991 prescribing for the Modified Procedures on the Issuance and Use of the Revised Tax Credit Certificate and the Tax Debit Memo provides, viz: xxx xxx xxx B. The TCC shall be used in the payment of internal revenue liabilities of a taxpayer except for the following: 1. Payment or remittance for any kind of withholding tax by taxpayers. xxx xxx xxx In view of the foregoing, your request for the application by your client of Tax Credit Certificate No. 002270 issued to it on March 21, 1996 for the payment of its withholding tax liabilities is hereby denied for lack of legal basis. (VAT Ruling No. 123-90 dated May 14, 1990 and BIR Ruling No. 037-97 dated April 3, 1997). SDITAC Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)