BIR Ruling [DA-366-03]

October 13, 2003 BIR RULING [DA-366-03] 57; RR 2-98 DA-133-2000; 057-95; 163-94; UN 339-94 Blast Asia, Inc. Unit 715 Windsor Tower, 163 Legaspi Street, Legaspi Village Makati City 1229 Attention: Philip Edward B. Sagun Vice President Gentlemen : This refers to your letter dated 25 October 2001 relative to your request for tax exemption in view of your registration with the Board of Investments (BOI) as a non-pioneer new IT firm in the fields of (A) Development of Customized Web-Based CRM Business Solutions; and (B) Application Service Provider for Sales Force Automation. It is represented that BLASTASIA, INC., a company with business address at Unit 715 Windsor Tower, 163 Legaspi Street, Legaspi Village Makati City, was granted registration under Certificate No. 2001-141, issued by BOI and dated September 18, 2001. Based on the foregoing, you seek tax exemption as set forth under the BOI General Terms and Conditions which states that the enterprise shall be entitled to an Income Tax Holiday (ITH) for a period of Four Years from August 2001, or from actual start of commercial operation, whichever comes first, but in no case earlier than the date of registration. In reply, please be informed that as a BOI registered enterprise, you shall be enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a)(1) of the Omnibus Investments Code of 1987 for four years from August 2001, or from actual start of commercial operations, whichever comes first, but in no case earlier than the date of registration. Moreover, 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, BLASTASIA, INC. is exempt from the payment of income tax and consequently from the creditable withholding tax prescribed in the Revenue Regulations 2-98, implementing Section 57(B) of the Tax Code of 1997 for a period of four (4) years starting August 2001 or actual start of commercial operations, whichever comes first, but in no case earlier than the date of registration. (BIR Rulings No. 163-94 dated December 2, 1994, UN 339-94 dated December 6, 1994, 057-95 dated March 16, 1995, DA-133-2000 dated March 3, 2000) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered void. IHCacT Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group