BIR Ruling [DA-256-97]

July 31, 1997 BIR RULING [DA-256-97] Canlubang Spinning Mills, Inc. Suite 1122-1123 Tytana Building Plaza Lorenzo Ruiz cor. Oriente Street Binondo, Manila Attention: Mr. Victor Ongking President Gentlemen : This refers to your letter dated April 10, 1997 requesting for a renewal of exemption from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that your company continued to sustain operating losses for the years 1995 and 1996. Documents submitted disclosed that your company, Canlubang Spinning Mills, Inc., incurred net operating losses for the years 1995 and 1996 as shown in your Financial Statements, particularly, the Statement of Income and Retained Earnings; that for the years 1995 and 1996, you have incurred net operating losses in the amount of P305,979.54 and P9,639,052.90, respectively. In reply, please be informed that Section 4 (d) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94 implementing Section 50 (b) of the Tax Code, as amended, the withholding tax prescribed in these regulations shall not apply to income payments of a payee who suffered net operating losses during the immediately preceding two (2) years. Such being the case, and since you have incurred net operating losses for two consecutive years from 1995 to 1996, this Office is of the opinion as it hereby holds that you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94, for the year 1997. (BIR Ruling No. 126-94 dated August 15, 1994) EDCIcH 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, (SGD.) SIXTO S. ESQUIVIAS IV OIC, Assistant Commissioner (Legal Service)