BIR Ruling [DA-314-99]

May 19, 1999 BIR RULING [DA-314-99] Diaz Murillo Dalupan 5-F Don Jacinto Building Dela Rosa corner Salcedo Streets Legaspi Village, Makati City Attention: Atty. Millard M. Manseguiao Gentlemen : This refers to your letter dated February 16, 1999 requesting in behalf of New Towers Development Corporation for ruling regarding its exemption from the payment of the 1% expanded withholding tax imposed under Revenue Regulations No. 12-94 for the taxable year 1997, due to net operating losses it has incurred for the taxable years 1995 and 1996. It is represented that you are a domestic corporation duly registered with the Securities and Exchange Commission (SEC); and that you have incurred net operating losses in the amount of P10,867,173.00 for the taxable year 1995 and P38,578,119.00 for the taxable year 1996, as shown by your audited Financial Statement as of December 31, 1995 and 1996 duly certified by an independent accountant. In reply, please be informed that under Section 4(d) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, implementing Section 50(b) of the Tax Code as amended [now Section 57(B) of the Tax Code of 1997], the withholding tax prescribed in these regulations shall not apply to income payments of a payee who suffered net operating losses during the immediately preceding two (2) years. caDTSE Such being the case, and since you have incurred net operating losses for taxable years 1995 and 1996, you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94 for the year 1997. (BIR Unnumbered Ruling No. 061-95 dated February 13, 1995, citing BIR Ruling No. 126-94 dated August 15, 1994) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation the facts turned out to be different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)