BIR Ruling [DA-131-97]

March 31, 1997 BIR RULING [DA-131-97] Philippine Airlines Post Office Box 1955 Manila Attention: Atty. Oscar C. Ventanilla, Jr. Tax Counsel Gentlemen : This refers to your letter dated January 27, 1997 requesting, in effect, for a ruling exempting you from the payment of expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that you suffered net operating losses in 1995 and 1996. Documents submitted show that per your audited financial statements for the fiscal years ended March 31, 1995 and March 31, 1996 particularly your Statements of Income and Deficit, you suffered losses in the amounts of P838,290,000.00 and P1,005,339,000.00, respectively. In reply, please be informed that under Section 4(d) of Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 12-94 implementing Section 50(b) of the Tax Code, as amended, the withholding tax prescribed in these regulations shall not apply to income payments to payee who suffered net operating losses during the immediately preceding two (2) taxable years. Such being the case, and since you have incurred net operating losses during the immediately preceding two (2) consecutive years from 1995 to 1996, this Office is of the opinion as it hereby holds that you are exempt from the creditable expanded withholding tax prescribed under Revenue Regulations No. 12-94 on income payments to you for the year 1997. (BIR Ruling No. 126-94 dated August 15, 1994) DISaEA 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, (SGD.) ALICIA L. TOMACRUZ Head Revenue Executive Asst. (Legal Service)