BIR Ruling [DA-148-00]

March 10, 2000 BIR RULING [DA-148-00] Tokai Rika Philippines, Inc. Toyota Sta. Rosa (Laguna) Industrial Complex SEPZ, Barangay Pulong, Sta. Cruz Sta. Rosa, Laguna Attention: Mr . Makoto Kubo Executive Vice President & Treasurer Gentlemen : This refers to your letter dated June 30, 1999 requesting for an exemption from the 1% creditable withholding tax on the income payments made to your company. It is represented that your company, Tokai Rika Philippines, Inc. (TRP) is registered with the Philippine Economic Zone Authority on August 24, 1995 under Certificate of Registration No. 95-81 on a pioneer status for the manufacture of switches used in the automobile industry, i.e. lever combination switch, courtesy lamp switch, hazard warning switch and back-up lamp; and that the aforementioned project is entitled to a six (6) year income tax holiday incentive from the start of its commercial operations. In reply, please be informed that Section 2.57.5(B)(2) of Revenue Regulations No. 2-98 provides that income payments to "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" shall be exempt from the creditable withholding tax. Such being the case, income payments to Tokai Rika Philippines, Inc. shall be exempt from the creditable withholding tax under Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997. (BIR Ruling No. DA-016-99 dated January 11, 1999) 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, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)