BIR Ruling [DA-152-97]

April 8, 1997 BIR RULING [DA-152-97] Law Office of A.M. Sison, Jr. & Associates Suite 2002-A 6776 Ayala Avenue Condominium 6776 Ayala Avenue Makati City Attention: Atty . Leonardo A . Aurelio Gentlemen : This refers to your letter dated March 20, 1997 requesting that your client, Guoco Ceramics, Inc. (GCI), (formerly First Lepanto Ceramics) be allowed to pay its basic income tax liabilities for FY ended June 30, 1994 in the amount of P15,394,514.80 without the 25% surcharge, interest and penalty. cdtech It is represented that on October 16, 1989 your client, First Lepanto Ceramics, now GCI, was registered by the Board of Investments (BOI) as a non-pioneer, new producer of glazed floor titles under Executive Order No. 226, entitled to the incentive of income tax holiday for four (4) years from October 1, 1990 or from the start of its commercial operations, whichever comes first, but in no case earlier that the date of registration, and provided that the plant shall be located outside Metro Manila. That on October 17, 1994, First Lepanto Ceramics filed with the Revenue District Office in Calamba its annual income tax return for the FY ended June 30, 1994 declaring therein a taxable income of P43,984,328.00 from its BOI registered activity; that it availed of the income tax holiday incentive and therefore, it did not pay any income tax. It is also represented that GCI filed an application for availment of the income tax holiday incentive with the BOI; that since your client has not received any reply from the BOI, and in order to avoid further running of interest, GCI offered to pay the basis income tax of P15,394,514.80, requesting however, for the waiver of surcharge, interest and penalty considering that the payment is voluntary and any delinquency has not yet been legally established. In reply, please be informed that based on the foregoing facts and documents presented, and finding the reasons to be meritorious, this Office accepts your client's offer to pay the basic income tax of P15,394,514.80, without the 25% surcharge but subject to 20% interest per annum computed up to date of payment pursuant to Section 249(a) in relation to Section 204(1)(a) of the Tax Code, as amended. However, this will not constitute a waiver of our right to investigate the income tax return filed by First Lepanto Ceramics (now Guoco Ceramics, Inc.) for the FY ended June 30, 1994 and assess and collect the corresponding deficiency taxes, inclusive of the statutory penalties that may still be found due from it. (BIR Ruling No. DA-076-96 dated February 20, 1996) Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue