BIR Ruling [DA-224-01]

October 29, 2001 BIR RULING [DA-224-01] 57 DA-072-98 Pueblo do Oro Development Corp. Gran Via, Business Park Pueblo De Oro, Canito-an Cagayan de Oro City Attention: Mr. Rodolfo L. Mees Vice President and General Manager Gentlemen : This refers to your letter dated February 1, 2001 and indorsed to this Office on February 5, 2001 by Regional Director Tamanatao S. Amerol, requesting for a written confirmation that Pueblo de Oro Development Corporation (PODC) is entitled to "pioneer incentive of Income Tax Holiday for six (60 years" on account of its registration with the Board of Investment (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987," and therefore, not subject to the expanded withholding tax pursuant to Revenue Regulations No. 2-98. Documents show that PODC is registered with the Board of Investments as a new operator of an industrial community on a non-pioneer status with pioneer incentives under Certificate of Registration No. 97-077 dated June 13, 1997; and that you have been granted a six-year income tax holiday incentive from July 1997 or from the actual start of operations, but not earlier than your date of registration. 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. (BIR Ruling No. DA-072-98 dated march 11, 1998) Accordingly, since PDOC 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 July 1997, this Office is of the opinion, as it hereby holds, that it is exempt from the payment of the creditable withholding tax imposed under Revenue Regulations No. 2-98, on income payments received by it during the aforementioned period with respect to its registered activity. 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 and Inspection Group