BIR Ruling [DA-214-01]

October 22, 2001 BIR RULING [DA-214-01] 57; 72-99 Maynilad Water Services, Inc . MWSS Compound, Katipunan Road Balara, Quezon City Attention: Mr . Rodolfo B . Reyno Comptroller Gentlemen : This refers to your letter dated June 5, 2001 requesting for a Certificate of Tax Exemption pursuant to Revenue Regulations No. 2-98 on account of your registration with the Board of Investment (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987." It is represented that Maynilad Water Services, Inc. (MWSI) is registered with the Board of Investments (BOI) as New Operator of Water Supply and Sewerage System for the West Service Area on a Pioneer Status under Certificate of Registration No. 97-201 dated January 13, 1998; and that you are enjoying a six-year income tax holiday incentive moved from August 1997 to August 2001 (per BOI Mancom Meeting of December 22, 1998) until August 2007. In reply, please be informed that under Section 2.57.5(B)(2) of Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997, the withholding tax prescribed in the said Regulations shall not apply to income payments to persons enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987, with respect to income from their registered activities. Accordingly, since Maynilad Water Services, Inc. (MWSI) is a BOI-registered enterprise, enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a)(1) of the Omnibus Investments Code of 1987 for a period of six (6) years reckoned from August, 2001, this office is of the opinion, as it hereby holds, that is exempt from the payment of the creditable withholding tax imposed under Revenue Regulations No. 2-98 (amending Rev. Regs. No. 6-85 as amended by Rev. Regs. No. 12-94), as amended, on income payments received by it during the aforementioned period unless sooner revoked due to any infraction of the terms and conditions of the Concession Agreement. ( BIR Ruling No. 072-99 dated March 11, 1998 ) aEHADT 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 as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal & Inspection Group