Ceres Homes Incorporated

April 27, 2007 BIR RULING [DA-275-07] 57 (B) DA-011-2007 Ceres Homes Incorporated 2nd Floor PGMC Building 76 Calbayog corner Libertad Street Mandaluyong City Attention: Mr. Mariano D. Martinez President Gentlemen : This refers to your letters dated February 02, 2007 and February 12, 2007 requesting for a Tax Exemption Certificate pursuant to Revenue Regulations No. 2-98, as amended, on account of your registration with the Board of Investments (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987." As represented, Ceres Homes Incorporated is a mass housing developer with existing project at Loma de Gato, Marilao Bulacan; that its project is duly registered with the Housing and Land Use Regulatory Board (HLURB) under Certificate of Registration No. 05721; that at present, it has an ongoing project called Deca Homes Subdivision located at Loma de Gato, Marilao Bulacan; that it has been registered with the Board of Investments per Certificate of Registration No. 2006-173 dated December 29, 2006 as expanding developer of mass housing project on a non-pioneer status under the Omnibus Investments Code of 1987 (E.O. 226); that it shall be entitled to income tax holiday (ITH) for a period of three (3) years from December 2006 or actual start of commercial operations/selling, whichever is earlier, but in no case earlier than the date of registration; and that the ITH shall be limited only to the revenue generated from its registered activity (Deca Homes Subdivision-Marilao, Bulacan). In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as last amended by Revenue Regulations No. 30-2003 implementing Section 57 (B) of the Tax Code of 1997, as amended, 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. Accordingly, since Ceres Homes Incorporated is a BOI registered enterprise, enjoying exemption from payment of income taxes pursuant to EO 226, 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, as last amended by Revenue Regulations No. 30-2003 on income payments received by it during the specified period in connection with its registered activity. EScAHT Consequently, as a supplier of services, Ceres Homes Incorporated is exempt from the provision of Section 3 (M) of Revenue Regulation No. 17-2003, as amended, which imposes upon the top ten thousand (10,000) private corporations the duty to withhold an equivalent of two (2%) percent creditable withholding tax on their income payments to their supply of services. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service