BIR Ruling [DA-101-06]

March 9, 2006 BIR RULING [DA-101-06] Rev. Regulations No. 17-2003; DA-046-99 Luzon Electronics Technology, Inc . Special Export Processing Zone, Gateway Business Park, Javalera, Gen. Trias, Cavite Attention: Ms . Luz Cuyco Finance Manager Gentlemen : This refers to your letter dated October 17, 2005 requesting for an exemption from withholding tax on income payments. SDIaHE It is represented that you are a PEZA-registered company with PEZA Certificate No. 95-121; and that you opine that you enjoy exemption from withholding tax pursuant to Revenue Regulations No. 2-98. In reply, please be informed that being a PEZA-registered enterprise pursuant to R.A. 7916, the provisions of Revenue Regulations No. 2-98 will apply, viz: "SEC. 2.57.5. Exemption from Withholding . The withholding of creditable withholding tax prescribed in these Regulations shall not apply to income payments made to the following: (B) Persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special, such as but not limited to the following: (1) . . . (2) Corporations registered with the Board of Investments and enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investment Code of 1987;" IN VIEW OF THE FOREGOING, this Office hereby holds that payments made by your customers are not subject to creditable withholding tax provided for by Section 2.57.5 of Revenue Regulations No. 2-98. 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 as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service