BIR Ruling [DA-068-96]

February 9, 1996 BIR RULING [DA-068-96] Ramon F. Garcia & Company Suite 410 Manila Bank Building Ayala Avenue, Makati City Attention: Mr . Ramon F . Garcia Gentlemen : This refers to your letter dated January 12, 1996 stating that your client, Brentwood Land Corporation with address at 7th Floor Manila Bank Building, Ayala Avenue, Makati City suffered net operating losses during the immediately preceding two (2) years. In view thereof, you now request in behalf of your client for exemption from withholding tax. In support of your request, you submitted the Income Tax Returns and financial statements of the said company for the year ending June 30, 1994 and 1995 which show that the net operating losses for the said years are P7,302,399.00 and P12,144,839.79, respectively. cdtech In reply, please be informed that pursuant to Section 3 of Revenue Regulations No. 12-94 amending Section 4 of Revenue Regulations No. 6-85, otherwise known as the "Expanded Withholding Tax Regulations" stating "SEC. 3. Section 4 of Revenue Regulations No. 6-85 is hereby amended to read as follows: "SEC. 4. Exemption from Withholding . The withholding of tax prescribed in these regulations shall not apply to income payments in the following cases: xxx xxx xxx (d) In the case of a payee who suffered net operating losses during the immediately preceding two (2) tax years; xxx xxx xxx" this Office is of the opinion as it hereby holds that Brentwood Land Corporation is exempt from the expanded withholding tax on income payments made to the said corporation for the year 1996. 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. (BIR Ruling No. 126-94 dated August 15, 1994) cdta Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)