BIR Ruling [DA-281-96]

July 30, 1996 BIR RULING [DA-281-96] Canlubang Spinning Mills, Inc. Suite 1122-1123 Tytana Building Plaza Lorenzo Ruiz Cor. Oriente Binondo, Manila Attention: Mr . Victor Ongking Gentlemen : This refers to your letter dated April 23, 1996 requesting for exemption from the payment of the expanded withholding tax imposed under Revenue Regulations no. 12-94 on the ground that you have incurred operational losses for the years 1994 and 1995. Documents submitted show that in your audited financial statements for the years ended December 31, 1994 and 1995 particularly your Statement of Income Retained Earnings, it is indicated that you have incurred net operating losses in the respective amounts of P1,252,835.97 and P305,979.54 for the years 1994 and 1995, respectively. In reply, please be informed that under 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 the consecutive years from 1994 to 1995, this office is of the opinion as it hereby holds that you are exempt from the payment of the credible withholding tax prescribed under Revenue Regulations No. 12-94 for the year 1996. (BIR Ruling No. 126-94 dated August 15, 1994) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation the facts turned out to be different, then this ruling shall be considered null and void. cdtech Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Rev. Executive Assistant Legal Service