BIR Ruling [DA-342-97]

October 21, 1997 BIR RULING [DA-342-97] Hi Cement Corporation 5th Floor, Kalayaan Building 164 Salcedo St., Legaspi Village Makati City Attention: Mr. Mario B. Casupanan AVP-Comptroller Gentlemen : This refers to your letters dated April 1, 1997 and May 28, 1997 requesting for exemption from the 1% creditable withholding tax on the income tax payments made to your company. It is represented that your company, Hi Cement Corporation, is registered with the Board of Investments (BOI) as a new Domestic Producer of Cement on a pioneer status since May 23, 1994; that you were granted by the BOI, a four (4) year Income Tax Holiday for your new line starting June, 1998 or from the actual start of your commercial operation, whichever comes first but not earlier than the date of registration; that your exemption from the payment of income taxes shall be on the incremental sales derived from your new line which is estimated to constitute some 70% of your total sales. In reply, please be informed that Section 4 (b) (2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, explicitly provides that the withholding tax therein prescribed shall not apply to income payments to persons enjoying exemption from the payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. As a pioneer enterprise registered with the BOI, you have been granted a Certificate of Registration which entitles you to income tax holiday pursuant to Section 39 (a) (1) of the Omnibus Investments Code of 1987, as amended. Such being the case, the income payments made to you by any of the top 5,000 corporations in the Philippines shall not be subject to the 1% creditable expanded withholdings tax prescribed in Section 1 (n) of Revenue Regulations No. 12-94. (BIR Ruling No. 182-94 dated December 15, 1994). AHTICD 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, (SGD.) SIXTO S. ESQUIVIAS IV OIC, Assistant Commissioner (Legal Service)