Advanced Science and Technology Institute

May 19, 2008 BIR RULING [DA-305-08] DA447-03 Advanced Science and Technology Institute Department of Science and Technology ASTI Building, Technology Park Complex C.P. Garcia Avenue, U.P. Campus Diliman, Quezon City Attention: Ms. Gay Concepcion S. Bugagao Accountant III Gentlemen : This refers to your letter dated May 10, 2007 stating that the Advanced Science and Technology Institute (ASTI) is a research and development institute on Information and Communications Technology (ICT) and Microelectronics under the Department of Science and Technology (DOST); that ASTI conducts trainings and seminars to transfer ASTI's R&D outputs and advanced know-how to the academe, industry and government sectors which is in line with its mandate and part of its Technology Transfer Program; that ASTI has been intensifying its efforts in providing trainings in the areas of ICT and Electronics with the aim of assisting individuals and organizations from various sectors of society through skills and capability building; that a number of institutions have already availed of these trainings; that of these institutions is the Philippine Health Insurance Corporation (Philhealth) which still has a balance on its payment to ASTI for the training they had availed; and that however, release of the said payment requires the submission of the above-mentioned certificate of exemption. In connection therewith, you now request for a ruling that income payments made to ASTI is exempt from withholding tax pursuant to Section 2.57.5 of Revenue Regulations No. 2-98, as amended. In reply thereto, please be informed that under Section 2.57.5 (A) of Revenue Regulations No. 2-98, as amended, implementing Section 57 (B) of the Tax Code of 1997, the withholding taxes thereon prescribed shall not apply to income payments made to the national government and its instrumentalities, including provincial, city or municipal government. SUCH BEING THE CASE, this Office holds that income payments made to ASTI is exempt from the payment of the creditable withholding tax pursuant to Section 2.57.5 (A) of Revenue Regulations No. 2-98, implementing Section 57 (B) of the Tax Code of 1997. 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. cSEDTC Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service