BIR Ruling [DA-325-00]

August 28, 2000 BIR RULING [DA-325-00] RR 2-98 DA-016-99 DA-325-2000 Dressy, Inc. 55 Mindanao Avenue Quezon City Attention: Mr . Edward Ting President Gentlemen : This refers to your undated letter requesting in effect 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 Investment Code of 1987". It is represented that Dressy, Inc. has been registered with the BOI as Expanding Producer of Garments (High-End Children's Wear) under the Program Expansion Project within Metro Manila Exempt from Location Restriction on a Non-Pioneer Status under Certificate of Registration No. EP 98-123 dated August 13, 1998; and that you are entitled to an Income Tax Holiday for three (3) years pursuant to No. 6(a) of the Specific Terms and Conditions accompanying your registration, viz: "6. The enterprise shall be entitled to the following incentives: "a. Income tax holiday (ITH) for three (3) years to be reckoned from May 1999 or from actual start of commercial operation, whichever comes first but not earlier than the date of registration. For purposes of computing ITH, a base figure of US$2,273,182.16 representing the highest attained sales value prior to registration of this expansion project shall be used. Date of Filing: Within one (1) month after filing of ITR with the BIR." cHDAIS In reply, please be informed that Section 2.57.5(B)(2) of Revenue Regulations No. 2-98 provides that income payments to "corporations registered with the Board of Investments and enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investment Code of 1987" shall be exempt from the creditable withholding tax. Such being the case, income payments to Dressy, Inc. shall be exempt from the creditable withholding tax under Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997 for a period of three (3) years starting May 1999 or from actual start of commercial operation, whichever comes first but not earlier than the date of its registration. (BIR Ruling No. DA-016-99 dated January 11, 1999) 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal and Inspection Group