BIR Ruling [DA-313-96]

August 16, 1996 BIR RULING [DA-313-96] Woodchips International, Inc. Unit 904 Westwood Condominium 23 Eisenhower St., Greenhills San Juan, Metro Manila Attention: Mr . Robert T . Tiu President Gentlemen : This refers to your letter dated August 17, 1996 stating that your corporation suffered net operating losses during the immediately preceding two (2) years. In view thereof, you now request for exemption from the creditable expanded withholding tax imposed under Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 12-94. In support of the request, you submitted your financial statements and income tax returns for the years 1994 and 1995 which show that the net operating losses for the said years are in the respective amounts of P471,091.63 and P468,716.25. cdta In reply, please be informed that pursuant to Section 3 of Revenue Regulations No. 12-94 amending Section 4 of Revenue Regulations No. 6-85, otherwise known as the Expanded Withholding Tax Regulations" stating "SEC. 3. Section 4 of Revenue Regulations No. 6-85 is hereby amended to read as follows: "SEC. 4. Exemption from Withholding . The withholding of tax prescribed in these regulations shall not apply to income payments in the following cases: xxx xxx xxx (d) In the case of a payee who suffered net operating losses during the immediately preceding two (2) tax years; xxx xxx xxx." this Office is of the opinion as it hereby holds that you are exempt from the creditable expanded withholding tax on income payments made to you for the year 1996. 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. (BIR Ruling No. 126-94 dated August 15, 1994) cd Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)