BIR Ruling [DA-528-06]

September 1, 2006 BIR RULING [DA-528-06] 010-2002 Isla Lipana & Co. 29th Floor, Philamlife Tower Paseo de Roxas, Makati City Attention: Atty. Alexander B. Cabrera Managing Partner, Tax Services Gentlemen : This refers to your letter dated June 27, 2006 requesting on behalf of your client, SVI Information Services Corporation (SVI ISC), for an extension of sixty (60) days within which to file the short period return for the absorbed company, Philippine Database Services, Inc. (PDSI), relative to the merger between the two (2) companies, which was approved by the Securities and Exchange Commission (SEC) on June 2, 2006. It is represented that SVI ISC is the surviving corporation which was merged with PDSI; that on June 2, 2006, the SEC approved the merger between the two (2) companies; that under BIR Ruling No. 010-2002, the Bureau of Internal Revenue (BIR) citing the Supreme Court ruling in the case of the Bank of the Philippine Islands vs. Commissioner of Internal Revenue , G.R. No. 144653, to the effect that the 30-day period within which the absorbed companies are required to file short period return should be reckoned from the SEC's approval of the merger; that the rationale behind it is that the SEC approval of the merger is the operative act that gives legal effect to the reorganization and results to the cessation of the separate juridical personality of the absorbed companies; thus, in applying the said ruling to the case at bar, the deadline for the absorbed company to file the short period return shall be on July 2, 2006; and that due to lack of material time for the engaged external auditor to complete the audit of the financial statements of the absorbed company that would be the basis for the latter's short period return, it was physically impossible for the absorbed company to meet the July 2, 2006 deadline. In reply thereto, please be informed that since the above-cited reason is found to be meritorious, your request for an extension of sixty (60) days reckoned from July 2, 2006, or until September 1, 2006, within which to file the short period return of the absorbed company, is hereby granted. (BIR Ruling No. 010-2002 dated February 19, 2002). CcAIDa Very truly yours, (SGD.) GREGORIO V. CABANTAC Deputy Commissioner