BIR Ruling [DA-300-03]

September 11, 2003 BIR RULING [DA-300-03] 57 (B); 060-2002 Steel Asia Manufacturing Corporation 6/F 8101 Pearl Plaza Bldg. 5 Pearl Drive, Ortigas Center Attention: Mr. Benjamin O. Yao President Gentlemen : This refers to your letter dated June 30, 2003 requesting for exemption from the creditable expanded withholding tax. It is represented that Steel Asia Manufacturing Corporation is registered with the Board of Investments (BOI) as a New Domestic Producer of Long Steel Products on a preferred Pioneer Status under the Omnibus Investment Code of 1987 (E.O. 226); that as a holder of Certificate of Registration No. DP 97-139 dated June 27, 1997, Steel Asia Manufacturing Corporation enjoys certain incentives among others, a 100% income tax holiday for six (6) years beginning October 1, 1997; and that on October 8, 1999, BOI granted Steel Asia Manufacturing Corporation request for a suspension of its income tax holiday availment for a period of 24 months, from October 1, 1997 to October 1, 1999, changing the reckoning period of its income tax holiday (ITH) availment from October 1, 1997 to October 1, 1999. In reply, please be informed that under Section 2.57.5(B)(2) of Revenue Regulations No. 2-98, as amended by Revenue Regulations No. 6-2001 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 income tax provided by Republic Act No. 7916 and the Omnibus Investment Code of 1987. Accordingly, since Steel Asia Manufacturing Corporation is a BOI-registered enterprise, enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a)(1) of the Omnibus Investment Code of 1987, for a period of six (6) years reckoned from October 1, 1999, 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 amended by Revenue Regulations No. 6-2001 on income payments received by it during the aforementioned period, in connection with its registered activity. (BIR Ruling No. DA-060-2002 dated April 1, 2002) 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, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group