BIR Ruling [DA-094-97]

March 12, 1997 BIR RULING [DA-094-97] Agnus Realty & Development Corporation 2 G. Soriano, San Juan, Metro Manila Attention: Mr. Noel S. Sunga Managing Director Gentlemen : This refers to your letter dated February 11, 1997 requesting for exemption from the withholding of creditable income tax by your buyers/customers on income payments to your corporation, including the proceeds of your sale of real property under Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 12-94. It is represented that your corporation suffered net operating losses during the immediately preceding two (2) years; and that in support of the request, you submitted your audited financial statements for the years 1995 and 1996 which show that the net operating losses for the said years are in the respective amounts of P587,944.27 and P113,090.17. 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: "Section 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 you are exempt from the creditable expanded withholding tax on income payments made to you for the year 1997. 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) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: (SGD.) ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)