BIR Ruling [DA-022-99]

January 12, 1999 BIR RULING [DA-022-99] Samar Coco Products Manufacturing Corporation Rm. 1510 State Centre Building #333 Juan Luna St., Binondo, Manila Attention: Mr . Manuel C . Co Treasurer Gentlemen : This refers to your letter dated December 7, 1998 requesting for a Tax Exemption Certificate pursuant to Revenue Regulations No. 2-98 on account of your registration with the Board of Investment (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987." prcd It is represented that your company, with plant address located at Brgy. Malajog, Tinambacan District, Calbayog City, Western Samar has been registered with the BOI on a preferred non-pioneer status with entitlement to pioneer incentives being located in a less-developed area as an Existing and Expanding Export Producer of Crude and Refined Coconut Oil and Copra Cake under Certificate of Registration No. EP-96-242 dated November 7, 1996; and that you are entitled to all Income Tax Holiday of six (6) years pursuant to No. 5(a) of the Specific Terms and Conditions accompanying your Certificate of Registration, viz: "5. The enterprise shall be entitled to the following incentives: a. Income Tax Holiday (ITH) for six (6) years starting September, 1996, or from actual start of commercial operation of its expansion project whichever comes first but in no case earlier than the date of registration with base figure of 18,854 MT for cochin oil and 7,287 MT for copra cake. Date of Filing: Within one (1) month from filing of the final ITR with BIR." In reply, please be informed that under Section 2.57.5(B)(2) of Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997, the withholding tax prescribed in the said Regulations shall not apply to income payments to persons enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. Accordingly, since Samar Coco Products Manufacturing Corporation is a BOI-registered enterprise, enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a)(1) of the Omnibus Investment Code of 1987, for a period of six (6) years reckoned from the start of its commercial operation, this Office is of the opinion, as it hereby holds, that it is exempt from the payment of the creditable withholding tax imposed under Revenue Regulations No. 2-98, on income payments received by it during the aforementioned period. (BIR Rulings No. 020-95 dated February 13, 1995) LLjur This ruling is 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 from the date of issuance. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)