BIR Ruling [DA-082-96]

February 21, 1996 BIR RULING [DA-082-96] Sam Bo Systems Philippines, Inc. Lot 1B, Block 6, Phase II Cavite Export Processing Zone Rosario, Cavite Attention: Mr . Hak Jin Kim Vice President Gentlemen : This refers to your letter dated December 12, 1995 requesting for the issuance of a certificate of exemption from the creditable withholding tax of 1% on income payments made to you as a local supplier of goods. It is represented that you are registered with the Export Processing Zone Authority under Certificate of Registration No. 93-38 dated August 6, 1993; and that you are enjoying an income tax holiday under P.D. No. 66. In reply, please be informed that Section 4(b)(2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, provides that the withholding tax therein prescribed shall not apply to income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. As an EPZA-registered enterprise, you are enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a)(1) of the Omnibus Investments Code of 1987. Such being the case, the income payments made to you as local supplier of goods shall not be subject to 1% creditable expanded withholding tax prescribed in Revenue Regulations No. 12-94. (BIR Ruling No. 182-94 dated December 15, 1994) 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, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)