BIR Ruling [DA-097-98]

March 19, 1998 BIR RULING [DA-097-98] Petroleum Technology & Research Corporation 2613 Old Panaderos Street Sta. Ana, Manila Attention: Ms . Rosselle Y . Doroteo Comptroller Gentlemen : This refers to your letter dated February 25, 1998 requesting for ruling regarding your exemption from the payment of the 1% expanded withholding tax imposed under Revenue Regulations No. 12-94 for the taxable year 1998, due to net operating losses you have incurred for the taxable years 1996 and 1997. It is represented that you are a domestic corporation duly registered with the Securities and Exchange Commission (SEC); and that you have incurred net operating losses in the amount of P3,799,587.98 for the taxable year 1996 and P6,316,766.42 for the taxable year 1997, as shown by your audited Financial Statement as of December 31, 1996 and 1997 duly certified by an independent accountant. In reply, please be informed that under Section 4(d) of the Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, implementing Section 50(b) of the Tax Code as amended [now Section 57(B) of the Tax Code of 1997], 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) years. Such being the case, and since you have incurred net operating losses for taxable years 1996 and 1997, you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94 for the year 1998. (BIR Unnumbered Ruling No. 061-95 dated February 13, 1995, citing BIR Ruling No. 126-94 dated August 15, 1994) cdta 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, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)