BIR Ruling [DA-178-98]

May 7, 1998 BIR RULING [DA-178-98] JGSummit Petrochemical Corporation 29TH Floor, Galleria Corporate Center EDSA Corner Ortigas Avenue Quezon City Attention: Mr . John Gokongwei, Jr . Chairman Gentlemen : This refers to your letter dated December 3, 1997 requesting for exemption from the 1% expanded withholding tax under Revenue Regulations No. 12-94. cdtech It is represented that JGSummit Petrochemical Corporation was granted by the Board of Investments (BOI) a Certificate of Registration No. DP-94-001 on May 24, 1994, as a New Domestic Producer of Polyethylene and Polypropylene on a Preferred Pioneer Status under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987"; that under the terms of its registration, it is entitled to an Income Tax Holiday (ITH) for six (6) years beginning June 1997 or from the actual start of its commercial operation whichever comes first but not earlier than the date of registration ; and that the start of such entitlement to an ITH was later amended to begin from October 1998 or from the actual start of its commercial operation whichever comes first but not earlier than the date of registration . In reply, please be informed that Section 4(b)(2) of Revenue Regulations No. 6-85, as amended by Rev. Regs. No. 12-94, provides that income payments to "persons enjoying income tax exemptions" shall be exempt from the expanded withholding tax. Such being the case, and since as represented you are registered with the BOI as a "New Domestic Producer of Polyethylene and Polypropylene "enjoying an ITH for six (6) years from October 1998 or from the actual start of your commercial operation, whichever comes first, income payments to you shall be exempt from the expanded withholding tax under Section 4(b)(2) of Revenue Regulations No. 6-85, as amended by Rev. Regs. 12-94.(BIR Ruling No. 057-95 dated March 16, 1995) 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.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group