BIR Ruling [DA-062-96]

February 2, 1996 BIR RULING [DA-062-96] Stella Technik Asia, Inc. Resins, Inc. Compound E. Rodriguez, Jr. Avenue Barrio Bagong Ilog Pasig, Metro Manila Attention: Mr . Meneleo J . Carlos, Jr . President Gentlemen : This refers to your letter dated September 7, 1995, requesting for a certificate of tax exemption from the 1% creditable expanded withholding tax of the income payments made by any of the top 5,000 corporations on their local purchase of goods from you. It is represented that you are a BOI-registered manufacturer of abrasive grinding and cut-off wheels which you sell to companies which may be among the top 5,000 corporations; and that you have suffered net operating losses during the immediately preceding two (2) years, as evidenced by the attached xerox copies of your income tax returns and duly audited Financial Statements for the years 1993 and 1994. In reply, please be informed that under Section 4 (d) of Revenue Regulations No. 6-85 of the Tax Code, as amended, the withholding tax therein prescribed shall not apply to income payments of a payee who suffered net operating losses during the immediately preceding two (2) years. Such being the case, the income payments made to you by any of the top 5,000 corporations as a local supplier of abrasive grinding and cut-off wheels shall not be subject to the 1% creditable expanded withholding tax prescribed in Section 1(n) of said Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94. (BIR Ruling No. 126-94 dated August 15, 1994) aisadc This ruling is being issued on the basis of the foregoing representations. However, if upon investigation, the facts turned out to be different, then this ruling shall be considered null and void. Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)