BIR Ruling [DA-063-03]

March 3, 2003 BIR RULING [DA-063-03] 57; RR 2-98 DA-133-2000 The Joyco Group 3/f CFC Administration Bldg. #13 E. Rodriguez Jr. Avenue Bagong Ilog, Pasig City 1600 Attention: Mauricio L. Navoa General Manager Gentlemen : This refers to your letter dated 25 October 2001 relative to your request for exemption from the withholding of Creditable Withholding Tax on income derived from the domestic sale of your products by virtue of your registration with the Board of Investments (BOI) pursuant to the provisions of the Omnibus Investments Code of 1987 (E.O. 226). It is represented that Joyco Universal Robina Corporation (Joyco) is a joint venture duly registered with the Securities and Exchange Commission with Registry No. A200017122 dated November 10, 2000 whose main line of business is to manufacture/sell lollipop candies and bubble gum; that it is also registered with the Bureau of Internal Revenue under Registration No. OCN 3RC0000098630 dated November 17, 2000; that it is also registered with the BOI as a New Export Producer of Confectionery Products (Lollipops) on a Non-Pioneer Status under E.O. 226 per Registration No. EP 2001-041 issued on March 7, 2001. Under its registration with the BOI, Joyco is entitled to various incentives, among which is the Income Tax Holiday (ITH) for four years starting April 2001 or from the start of commercial operations whichever comes first but in no case earlier than the date of registration. In reply, please be informed that Section 2.57.5 B(2) of Revenue Regulations 2-98, as amended (formerly Section 4(b)(2) of Revenue Regulations No. 6-85, as amended) provides that the withholding tax therein prescribed shall not apply to income payments to persons enjoying exemption from the payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. As a BOI-registered enterprise, you are entitled to an ITH for four years starting April 2001 or from the state of commercial operations (i.e. February 12, 2001) whichever comes first but in no case earlier than your date of registration ( March 7, 2001 ). Such being the case, income payments made to you from the domestic sale of your products shall not be subject to the creditable withholding tax prescribed in Section 2.57.5 of Revenue Regulations 2-98, as amended. ( DA-133-2000 dated March 3, 2000 ) cCESaH This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group