Third Millennium Oil Mills, Inc.

October 26, 2007 BIR RULING [DA-574-07] Third Millennium Oil Mills, Inc. Rm. 403, CSP Building 815 Quezon Avenue Quezon City Attention: Mr. Nelson S. Lim Vice-President/Treasurer Gentlemen : This refers to your letter dated July 25, 2007 requesting for confirmation of opinion that the income payments made to your company, Third Millennium Oil Mills, Inc., are exempt from the expanded withholding tax until May 31, 2008, the expiry date of your Income Tax Holiday (ITH) extension, as provided for under Revenue Regulations No. 2-98, as amended. SEDaAH In BIR Ruling No. DA-212-2003 dated July 8, 2003, we confirmed that payments made to your company during the effectivity of your ITH are exempt from withholding tax, to wit: ". . . Such being the case, and since you are a BOI-registered enterprise enjoying an income tax holiday for a period of six (6) years from the start of your commercial operations (August 2001 or actual start of commercial operations), income payments made to you from August 2001, the start of your commercial operation, until December 2006 shall not be subject to the 1% creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended (BIR Ruling No. DA-553-99 dated September 23, 1999)." Thereafter, BIR Ruling No. DA-638-2006 dated October 27, 2006 was issued to your company, amending the earlier ruling, portion of which states that: aITECD "In reply, please be informed that your request for an amendment of BIR Ruling No. DA-212-2003 dated July 8, 2003 is hereby granted since the amendment would just extend the income incentive of the company as evidenced by the certificate from BOI extending your company's ITH up to May 2007. Accordingly, this office confirms that income payments made to Third Millenium Oil Mills, Inc. from the period June 2001 until May 2007 shall not be subject to the 1% creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended." It is now represented that in a letter dated July 16, 2007, the Board of Investments (BOI) approved the company's application for an extension of its income tax holiday by a period of one (1) year. The approved bonus year is for the period June 1, 2007 to May 31, 2008 in line with the indigenous raw materials criterion pursuant to Art. 39 (a) (1) (ii) of Executive Order (EO) No. 226. In reply, please be informed that the income payments made and to be made to your company until May 31, 2008 are exempt from creditable withholding tax under Revenue Regulations No. 2-98, as amended, considering that its income tax holiday has been extended by the BOI until May 31, 2008. ATESCc 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 as null and void. TIaEDC Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service