BIR Ruling [DA-393-98]

August 27, 1998 BIR RULING [DA-393-98] Grand Circuit Industry Philippines, Inc. Ledesma Compound, Bo. Patubig Marilao, Bulacan Attention: Mr . Rolando Celso SP Magpayo Admin/Accounting Manager Gentlemen : This refers to your letter dated April 6, 1998 requesting exemption from the 1% expanded withholding tax from your customer's income payments in your favor. LLpr It is represented that Grand Circuit Industry Philippines, Inc. (GCIPI), is a BOI-registered corporation with Registration Certificate No. EP 95-260 issued on March 20, 1996; that as such, it is entitled to a four (4)-year income tax holiday to be reckoned from September 1996; and that the company is also registered with the Securities and Exchange Commission on February 8, 1996 as a corporation engaged in operating, conducting and maintaining the business of manufacturing, importing, buying, selling or otherwise dealing in, at wholesale such goods as printed circuit boards, electronic assemblies/sub-assemblies and other related parts and accessories and goods of similar nature, and any and all equipment, materials, supplies used or employed in or related to the manufacture of such finished products. In reply, please be informed that under Section 4(b)(2) of Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 12-94 and as further amended by Revenue Regulations No. 2-98 implementing Section 57(B) of the Tax Code of 1997, the withholding taxes thereon prescribed shall not apply to income payment to persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special. Such being the case, and since you are a BOI-registered company granted an income tax holiday reckoned from September, 1996, income payments made to you shall be exempt from the 1% expanded withholding tax prescribed under Revenue Regulations No. 6-85 as amended by Revenue Regulations No. 12-94 and as further amended by Revenue Regulations No. 2-98 implementing Section 57(B) of the Tax Code of 1997, up to September, 2000. (BIR Ruling No. 163-94 dated December 2, 1994) Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)