BIR Ruling [DA-075-96]

February 20, 1996 BIR RULING [DA-075-96] R.E. Cabote & Associates 3rd Floor, Vernida IV Bldg. Alfaro Street, Salcedo Village Makati City Attention: Attys . Regulus E . Cabote and Emelyn Corpus-Martinez Gentlemen : This refers to your letter dated December 12, 1995 requesting on behalf of your client, Philippine Phosphate Fertilizer, Inc. (Philphos) for exemption from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that it has suffered net operating losses during the immediately preceding two (2) years. cdta In reply, please be informed that under Section 4 (d) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, implementing Section 50 (b) of the Tax Code, as amended, the withholding tax prescribed in these regulations shall not apply to income payments of a payee who suffered net operating losses during the immediately preceding two (2) taxable years. Such being the case, and since as represented, Philphos has incurred net operating losses of P106,505,717 for the year 1994 and P419,612,976 for the year 1993 as shown by its Audited Financial Statements as of December 31, 1994 and 1993, Philphos is exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94 for the year 1995 [BIR Ruling No. 126-94 dated August 15, 1994] This ruling is being issued on the basis of the foregoing facts as represented. 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