BIR Ruling [DA-615-04]

December 6, 2004 BIR RULING [DA-615-04] RR 2-98; DA-472-2003 Florecita P. Flores Lawyer and Tax Consultants 7307 Cypress St., Marcelo Green Village Paraaque City M a d a m : This refers to your letter dated October 9, 2004 requesting on behalf of your client Maynilad Water Services, Inc. (Maynilad), confirmation of your opinion that your client continues to enjoy its Income Tax Holiday (ITH) under its registration with the Board of Investments (BOI). It is represented that Maynilad was registered by the Board of Investments under Certificate No. 97-201 dated January 13, 1998 as "New Operator of Water Supply and Sewerage System for the West Service Area" with the status of "Pioneer"; that the 6-years ITH would have started on August 1997 or from actual start of commercial operation whichever comes first; that Maynilad's start of actual commercial operations was on August 21, 2001; that however, the reckoning of the 6-years ITH was moved to August 2001 pursuant to the approval by the BOI Management Committee meeting held on December 22, 1998 and conveyed to Maynilad through the letter dated January 6, 1999 of Mr. Rafaelito H. Taruc, Director, Infrastructure and Service-Oriented Industries Department; and that Maynilad should not be liable for any income tax, national or local, until July 2007. In reply, please be informed that since the reckoning date of your ITH incentives was moved from August 1997 to August 2001 by virtue of the approval by the BOI Management Committee meeting held on December 22, 1998, this Office is of the opinion that your ITH shall be until July 2007. SHADEC Accordingly, since Maynilad is a BOI-registered enterprise enjoying exemption from the payment of income tax pursuant to Section 39(a)(1) of the Omnibus Investments Code of 1987 for a period of six (6) years reckoned from August 2001, this Office hereby confirms your opinion that Maynilad should not be liable for any income tax, national or local, until August 2007. 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 as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group