Firm Builders Realty Development Corporation

February 6, 2007 BIR RULING [DA-070-07] 57 (B) DA-349-2004 Firm Builders Realty Development Corporation 15 Aguinaldo Street, Tuguegarao City Attention: Engr. Robert Malonzo Project Manager Gentlemen : This refers to your letter dated June 30, 2006, as indorsed by the Regional Director of Revenue Region No. 3, Tuguegarao City, dated July 26, 2006, requesting for Tax Exemption Certificate pursuant to Revenue Regulations No. 2-98, as amended, on account of your registration with the Board of Investments (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987." As represented, Firm Builders Realty Development Corporation is a real property developer habitually engaged in the business of developing and constructing affordable housing units; that at present, it has an ongoing project called Rio del Grande Subdivision Phase 1B and 1C located at Cagayan Province; that it has been registered with the Board of Investments per Certificate of Registration No. 2005-059 dated May 12, 2005 as new developer of mass housing project on a non-pioneer status under the Omnibus Investments Code of 1987 (E.O. 226); that since Firm Builders Realty Development Corporation is BOI registered, it enjoys exemption from paying income tax pursuant to Section 39 (a) (1) of the Omnibus Investments Code of 1987 for a period of four (4) years from May 2005 or actual start of commercial operations/selling, whichever is earlier, but in no case earlier than the date of registration; and that the income tax holiday shall be limited only to revenue generated from its registered activity. In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended by Revenue Regulations No. 6-2001 implementing Section 57 (B) of the Tax Code of 1997, as amended, 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. SEcADa Accordingly, since Firm Builders Realty Development 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, for a period of four (4) years reckoned from May 2005, 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, as amended by Revenue Regulations No. 6-2001 on income payments received by it during the specified period in connection with its registered activity. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service