Theta Petroleum Corporation

January 23, 2008 BIR RULING [DA-030-08] Section 57 (B); BIR Ruling No. DA-273-2006 Theta Petroleum Corporation Unit 2, 2/F Bldg. 2, 9th Avenue Bonifacio High Street Bonifacio Global City Attention: Joselito V. Abrogar Chief, Financial Officer Gentlemen : This refers to your letter dated February 22, 2007, requesting exemption from the payment of creditable withholding tax on income payments made to you pursuant to the Omnibus Investments Code of 1987. DcAaSI It appears from the documents submitted that your company is registered with the Board of Investments (BOI) as a new Industry Participant with New Investments in Storage, Marketing and Distribution of Petroleum Products under RA 8479 (Oil Industry Deregulation Law); that per your BOI Certificate of Registration No. 2005-134, you were granted an Income Tax Holiday (ITH), beginning November, 2005, or actual start of commercial operations, whichever is earlier but in no case earlier than the date of registration, until October 31, 2010; that, notwithstanding such ITH, your income are continuously being subjected to creditable withholding taxes; and that the creditable withholding taxes your customers deducted have already eaten up substantial portion of your available cash which you desperately need for your operations. In reply, please be informed that Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended, implementing Section 57 (B) of the Tax Code of 1997, the withholding tax prescribed in the said Regulations shall not apply to income payments made to persons enjoying exemption from payment of income taxes pursuant to the provisions of any law (general or special) like the Omnibus Investments Code of 1987. ScHADI Accordingly, since Theta Petroleum 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 Investments Code of 1987, income payments made by its local suppliers of goods shall not be subject to 2% expanded creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended, beginning November 2005 up to October 31, 2010. (BIR Ruling No. 189-2000 dated March 30, 2000). 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. cETDIA Very truly yours, (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal and Inspection Group