BIR Ruling [DA-198-96]

June 17, 1996 BIR RULING [DA-198-96] Petrochemicals Corporation of Asia Pacific 851 Antonio S. Arnaiz Avenue, Makati City Attention: Ms . Ma . Carmen Gemma C . Montano Company Controller Gentlemen : This refers to your letter dated January 17, 1996 requesting exemption from the creditable expanded withholding tax on income payments under Revenue Regulations No. 12-94. cdt It is represented that Petrochemicals Corporation of Asia Pacific (PETROCORP) is a corporation organized and existing under the laws of the Philippines; that it is registered with the Board of Investments (BOI) as a New Producer of Polypropylene (PP) Resin on a pioneer status under 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 six (6) years from July, 1996 the actual start of commercial operation and reckoning of income tax holiday, 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 Revenue Regulations No. 12-94 implementing Section 50(b) of the Tax Code, as amended, provides that income payments to "persons enjoying exemption from payments of income taxes pursuant to the provisions 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 it is registered with the BOI as a New Producer of Polypropylene (PP) Resin enjoying an income tax holiday for six (6) years from July 1996, income payments to PETROCORP shall be exempt from the creditable expanded withholding tax starting July, 1996 pursuant to 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)