BIR Ruling [DA-097-00]

February 15, 2000 BIR RULING [DA-097-00] Steel Asia Manufacturing Corporation 6/F 8101 Pearl Plaza, Pearl Drive Ortigas Center, Pasig City Attention: Mr . Antonio M . Lorenzana President and COO Gentlemen : This refers to your letter dated December 1, 1999 requesting for a Tax Exemption Certificate pursuant to Revenue Regulations No. 2-98 on account of your registration with the Board of Investment (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987." It is represented that Steel Asia Manufacturing Corporation is a domestic corporation duly registered with the Securities and Exchange Commission with SEC Certificate of Registration No. AS094-00054 and with principal place of business at 8101 Pearl Plaza Condominium, Pearl Drive, Pasig City; that it is likewise registered with the Board of Investments under the provision of the Omnibus Investment Code of 1987 on a pioneer status as the New Producer of Long Steel Products under Certificate of Registration No. DP 97-139 dated June 27, 1997; and that you are entitled to an Income Tax Holiday of six (6) years pursuant to No. 9(a) of the Specific Terms and Conditions accompanying you Certificate of Registration, viz: "6. The enterprise shall be entitled to the following incentives: a. Income Tax Holiday (ITH) for a period of six (6) years from October 1997 or actual start of commercial operation, whichever comes first, but in no case earlier than the date of registration. Date of Filing: Within one (1) month from filing of the final ITR with BIR." In reply, please be informed that under Section 2.57.5(B)(2) of Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997, 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. Accordingly, since Steel Asia Manufacturing 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 Investment Code of 1987, for a period of six (6) years reckoned from the start of its commercial operation, 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, on income payments received by it within 6 years from October, 1997. (BIR Rulings No. 020-95 dated February 13, 1995) 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 from the date of issuance. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)