BIR Ruling [DA-301-99]

May 18, 1999 BIR RULING [DA-301-99] Eastern Steel Fabricators Phils., Inc. No. 212 Barrio Bagbaguin Meycauayan Bulacan, Attention: Ms. Grace N. Estrella Chief Accountant Gentlemen : This refers to your letter dated October 26, 1998 requesting for a Tax Exemption Certificate pursuant to Revenue Regulations No. 2-98 on account of your registration with the Board of Investment (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987". It is represented that Eastern Steel Fabricators Phils. Inc., with office address at No. 212 Barrio Bagbaguin, Meycauayan, Bulacan has been registered with the BOI on a pioneer status as a new producer of computer-aided prefabricated reinforcement steel bars under Certificate of Registration No. DP-97-241 dated February 25, 1998; and that you are entitled to an Income Tax Holiday of six (6) years pursuant to No. 8 (a) of the Specific Terms and Conditions accompanying your Certificate of Registration, viz: aHATDI "5. The enterprise shall be entitled to the following incentives: a. Income Tax Holiday (ITH) for a period of six (6) years to be reckoned from July 1998 or actual start of commercial operation whichever comes first but in no case earlier than the date of registration. Date of Filing: Within one (1) month from filing of the final ITR with BIR." In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98 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 the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. HcACTE Accordingly, since Eastern Steel Fabricators Phils., Inc. 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 the start of its commercial operation, 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, on income payments received by it during the aforementioned period. (BIR Rulings No. 020-95 dated February 13, 1995) This ruling is 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 from the date of issuance. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)