Hanjin Heavy Industries & Construction Co., Ltd.

March 9, 2007 BIR RULING [DA-148-07] 236; 133-99 Hanjin Heavy Industries & Construction Co., Ltd. 2nd Floor, Eurovilla 1 Condominium 142 Legaspi cor. Rufino Street Legaspi Village, Makati City Attention: Mr. In Yong Yong Finance Director Gentlemen : This refers to your letter dated February 20, 2007 requesting a ruling on the following matters: 1. Where does Hanjin Heavy Industries & Construction Co., Ltd. (Hanjin Heavy) reports its tax declarations? Is it LTDO-Makati, LTS or SBMA-BIR? 2. What are the requirements or documents to be submitted if you are to be registered with SBMA-BIR? 3. If you are to maintain your Makati-Office as Liaison-Office and declare two sources of income, e.g., Income-SBMA and Income-Outside SBMA, where do you report these income, is it a consolidated tax return filed with SBMA-BIR or separate filing for both LTDO-Makati and SBMA-BIR? 4. What TIN No. you will use once registered with SBMA-BIR and since you will keep your Makati Office as your extension office, what would happen with your registration with LTDO-Makati and what TIN shall be issued for the extension office? It is represented that Hanjin Heavy Industries & Construction Co., Ltd., with business address at Legaspi St., Makati City and classified as Large Taxpayer by LTDO-Makati, has transferred its head office in Subic Bay Freeport Zone; that it already notified the Securities and Exchange Commission (SEC) for its transfer and have registered with SBMA; that the transfer is to extend full support, coordination and better facilitation of services, as contractor of HHIC-Phil Shipyard Project, a locator of SBMA; that the transfer has caused confusion on where, BIR-Revenue District Office it should belong; and that BIR LTDO-Makati where it is presently registered claims confinement of all tax reporting regardless of where its office may transfer. In reply, please be informed of the following: 1. Section 77 (A) of the Tax Code of 1997 provides viz: "Sec. 77. Place and Time of Filing and Payment of Quarterly Corporate Income tax. (A) Place of Filing. Except as the Commissioner otherwise permits, the quarterly income tax declaration required in Section 75 and the final adjustment return required in Section 76 shall be filed with the authorized agent banks or Revenue District Officer or Collection Agent or duly authorized Treasurer of the city or municipality having jurisdiction over the location of the principal office of the corporation filing the return or place where its main books of accounts and other data from which the return is prepared are kept. Therefore, Hanjin-Heavy shall report its tax declarations at SBMA-BIR where its principal place of business will be located. 2. In case a registered person decides to transfer his place of business or his head office or branches, it shall be his duty to update his registration status by filing an application for registration information update in the form prescribed therefor (BIR Form 1905) together with the transfer commitment form and pay the necessary fees and the application for registration for SBMA-BIR. (BIR Form 1903) 3. Section 232 (A) of the Tax Code of 1997 provides that all corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their equivalents. In as much as Hanjin-Makati is merely a branch office of Hanjin-SBMA, the same is under obligation to keep a subsidiary books of accounts and records for its reportorial purposes. However, the filing of the consolidated tax return and the payment of taxes due thereon will be at SBMA-BIR where its principal place of business will be located pursuant to Section 77 (A) of the Tax Code. 4. Section 236 of the same Tax Code provides that any person required under the authority of the Code to make, render or file a return, statement or other document shall be supplied with or assigned a Taxpayer Identification Number (TIN) which he shall indicate in such return, statement or document filed with the Bureau of Internal Revenue for his proper identification for tax purposes. Moreover, Hanjin-Makati is not to be treated as a separate and distinct entity and is no longer to procure a TIN of its own, since the return or statement of the head office necessarily includes that of Hanjin-Makati. (BIR Ruling No. 133-99 dated August 24, 1999) CHIEDS This will serve as your authority to secure the release of your certificate of registration from LTDO-Makati and to report, file and pay all your internal revenue taxes at SBMA-BIR. 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service