BIR Ruling [DA-227-96]

July 5, 1996 BIR RULING [DA-227-96] Hon. Governor Roberto "Obet" M. Pagdanganan President League of Provinces of the Philippines Office of the Governor Malolos, Bulacan S i r : This refers to your letter to Pres. Fidel V. Ramos dated February 28, 1996 endorsing the request of Golden Lions Film Productions and Uni-Films Company, Inc. for full tax exemption, among others, of the movie "Tirad Pass: The Last Stand of Gregorio del Pilar." It is represented that in order to produce the aforesaid historical and patriotic film, a group of twenty (20) businessmen from Bulacan pooled their resources and formed Uni-Films Company, Inc., who, in partnership with Golden Lions Film Productions, spearheaded the production of the said movie; and that considering that the said film is responsive to the President's call for production of quality and patriotic movies, you are requesting, among others, for its exemption from the payment of all taxes. In reply, please be informed that when the aforesaid group of twenty businessmen from Bulacan pooled their resources to form a joint venture with Golden Lions Film Productions for the purpose of undertaking the production of the movie "Tirad Pass: The Last Stand of Gregorio M. del Pilar," the same comes within the purview of a corporation subject to the 35% corporate income tax as contemplated in Section 20(b) in relation to Section 24(a), both of the Tax Code, as amended. Each of the parties therefore to the subject joint venture, i.e., the twenty businessmen from Bulacan, and Golden Lions Film Productions, Inc., are liable for the payment of the individual income tax under Section 21(f) and the corporate income tax under Section 24(a) of the same Code, respectively, on the profit distributed to them by the joint venture. (BIR Ruling Nos. 20-80 and 47-80). The said joint venture is likewise liable to VAT as a separate taxable unit pursuant to Section 99 in relation to Section 102(a) of the Tax Code, as amended by R.A. No. 7716. cd Very truly yours, ALICIA P. CLEMENO Assistant Commissioner Legal Service cc: Lynn Danno-Moreno Director I I I Office of Budget and Corporate Affairs Atty. Jesus C. Sison Chairman Movie & Television Review & Classification Board