BIR Ruling [DA-179-98]

May 7, 1998 BIR RULING [DA-179-98] Apo Cement Corporation 3/F, CFC Commercial Building Pasig Blvd. Pasig City Attention: Mr . John Gokongwei, Jr . Chairman Gentlemen : This refers to your letter dated March 25, 1998 requesting for exemption from the 1% expanded withholding tax under Revenue Regulations No. 12-94. It is represented that Apo Cement Corporation was granted by the Board of Investments (BOI) a Certificate of Registration No. DP 93-065 on May 16, 1994, as a New Domestic Producer of Cement on a Preferred Pioneer Status under Executive 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 four (4) years beginning January 1998 or from the actual start of its commercial operation, whichever comes first, but not earlier than the date of registration ; and that for the purpose of determining the ITH incentive, a base figure/capacity equivalent to its existing capacity of 157,000 MTPY (cement) or the highest attained annual production volume for three (3) years prior to its commercial operation of the new line shall be used. 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 exemption from payment of income taxes pursuant to the provision of the Omnibus Investments Code of 1987, as amended", 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 Cement" enjoying an ITH for four (4) years from January 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. 9-85, 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