BIR Ruling [DA-196-96]

June 14, 1996 BIR RULING [DA-196-96] San Miguel Corporation 40 San Miguel Avenue Mandaluyong City, Metro Manila Attention: Mr . Jose S . Tayag, Jr . Vice-President & Tax Manager Gentlemen : This refers to your letter dated March 6, 1996 requesting in behalf of your subsidiary, San Miguel Yamamura Fuso Molds Corporation, exemption from the creditable expanded withholding tax on income payments to the latter under Revenue Regulations No. 12-94. It is represented that San Miguel Yamamura Fuso Molds Corporation is a corporation organized and existing under the laws of the Philippines and engaged in the production of molds for glass containers; that it is registered with the Board of Investments as a "New Domestic Producer" on a Non-Pioneer Status with registration No. DP 94-202 dated May 27, 1994 pursuant to Executive Order No. 226 otherwise known as the Omnibus Investments Code of 1987; and that under the terms of its registration it is entitled to an income tax holiday of four (4) years starting September 1994 or from the date of commercial operations in November 1994, whichever comes first but in no case 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 Revenue Regulations No. 12-94 provides that income payments to "persons enjoying exemption from payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended" shall be exempt from the creditable expanded withholding tax. Such being the case, and since San Miguel Yamamura Fuso Molds Corporation is registered with the BOI as a "New Domestic Producer" of molds for glass containers enjoying an income tax holiday for four (4) years from September 1994, income payments to it shall be exempt from the creditable expanded withholding tax under Section 4(b)(2) of Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 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. cdtech Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)