BIR Ruling [DA-185-00]

March 30, 2000 BIR RULING [DA-185-00] 57 (B), RR 2-98 182-94 Showa Aluminum Manufacturing Phils. Corp Lot 1, Block 1, Phase 3 First Cavite Industrial Estate Brgy. Langkaan 1, Dasmarias Cavite Attention: Mr . Kosho Abe President Gentlemen : This refers to your letter dated May 6, 1998 requesting for an exemption from the 1% Expanded Withholding Tax on your local sales to yours customers who belong to the top 5,000 corporations. Investigation conducted by Revenue District No. 54 of Revenue Region No. 9, Trece Martires City showed that you registered with the Philippine Economic Zone Authority under Certificate of Registration No. 96-007 dated January 15, 1996; that you are entitled to certain incentives and tax benefits, which include, among others, a four-year income tax holiday from the start of commercial operations, which was on November 9, 1996; that you are registered with the Securities and Exchange Commission on February 1996 to engage primarily in the manufacture and exportation of S-fin evaporator's and other aluminum-based products of similar nature; that you are registered with this Office under certificate of Registration RDO Control No. 96-540-001445 dated February 12, 1996 as a Value-Added Taxpayer; that after said investigation, Revenue Officer Edwin L. Descallar recommended in your favor the granting/approval of your application for exemption from the 1% Expanded Withholding Tax on the local sale of goods to your customers belonging to the top 5,000 corporations. cdlex In reply, please be informed that Section 4(b)(2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94 and as further amended by Section 2.57.5(B) of Revenue Regulations No. 2-98, is explicit in its provisions that the withholding taxes therein prescribed shall not apply to income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. Accordingly, as an enterprise entitled to certain incentives and tax benefits, which include, among others, a four-year income tax holiday from the start of your commercial operations on November 9, 1996, the income payments made to you by any of the top 5,000 corporations in the Philippines as a local supplier of goods shall not be subject to the 1% creditable expanded withholding tax prescribed in Section 1(n) of said Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94 and as further amended by Section 2.57.5(B) of Revenue Regulations No. 2-98. (BIR Ruling No. 182-94 dated December 15, 1994) This serves as your Certificate of Exemption. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)