BIR Ruling [DA-307-98]

July 3, 1998 BIR RULING [DA-307-98] Starworld Corporation Industrial Park and Community Development 3rd Floor, Solid House Bldg. 2285 Pasong Tamo Extension Makati City Attention: Mr. Nicolas C. Jurado General Manager Gentlemen : This refers to your letter dated March 17, 1998 requesting for the issuance of a certificate of exemption from withholding tax on real property. DAaHET Documents submitted disclosed that Starworld Corporation Industrial Park and Community Development (Starworld) is a domestic corporation engaged in real estate development; that it was granted a four (4)-years income tax holiday by the Board of Investments reckoned from December 1, 1997, the actual start of your commercial operations; that it is your opinion that the sale of your lots within the four (4)-year income tax holiday period starting from the said date are exempted from income tax and therefore automatically exempt from the required withholding tax on real property. IHaCDE In reply, please be informed that Section 4 (b) (2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, provides that the withholding tax prescribed in the Regulations shall not apply to income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. HDAaIc Accordingly, and since you are registered with BOI enjoying exemption from the payment of income taxes for a period of four (4) years in accordance with the provisions of the Omnibus Investments Code of 1987, this Office is of the opinion, as it hereby holds, that you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, as last amended by Rev. Regs. No. 2-98 for a period of four years from December 1, 1997 on income payments received by your company from the sale of your realties. 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 from that as represented, then this ruling shall be considered null and void. cHDaEI Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)