BIR Ruling [DA-617-04]

December 6, 2004 BIR RULING [DA-617-04] RR 2-98 DA-231-2002 dtd. 12/03/02 Globe Coco Products Manufacturing Corporation Barrio Lidong, Sto. Domingo, Albay Attention: Aibe Tan Corporate Secretary Gentlemen : This refers to your letter dated September 22, 2003, requesting a Certification for Income Tax Exemption for taxable years 2001 and 2002, since you were granted by the Board of Investments (BOI) a bonus Income Tax Holiday (ITH) incentive period for taxable years 2001 to 2002 after the expiration of the previously granted 4 year ITH. It is represented that your company is duly organized and existing under the laws of the Philippines with plant address at Bo. Lidong, Sto. Domingo, Albay; that it is registered with the Board of Investments (BOI) as Export Producer of Coconut Oil and Copra Cake under the Omnibus Investment Code of 1987; that as such you are entitled to Income Tax Holiday for four (4) years from its date of actual operation which is October 1996 or until October 2000; that you have been granted by this Bureau a tax exemption in BIR Ruling DA-021-99 dated January 12, 1999 for the covered period; that however on September 6, 2002, the BOI has approved your application for income tax holiday (ITH) for CY 2001 under Art. 39(a) of E.O. 226 for an approximate amount of P602,199.12 representing 100% of the normal income tax due on your registered production; that likewise on August 29, 2003, the BOI again approved your application for ITH incentive for the year ended December 31, 2002 under Art. 39(a) of E.O. 226 for an approximate amount of P1,187,246.11 representing 85% of the normal income tax due on your registered coconut and copra cake manufacturing activity under Certificate of Registration No. EP96-241, subject to adjustments after the completion of the BIR Audit; that you have both paid the issuance fees in the amount of P3,011.00 and P5,936.23, respectively. In reply please be informed that Sec. 2.57.5 (B)(2) of Revenue Regulations No. 2-98, as amended, provides that the withholding tax therein prescribed shall not apply to income payments made to corporations registered with the BOI and enjoying exemption from the payments of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. Considering that you are a corporation registered with the BOI and enjoying exemption from the payment of income taxes pursuant to the provisions of Article 39(9)(1) of the Omnibus Investments Code of 1987 until taxable year 2000, and subsequently for taxable years 2001 to taxable year ended December 2002, the income payment made to you pursuant to your BOI-registered activities during the ITH period shall not be subject to creditable withholding tax prescribed by Revenue Regulations No. 2-98, as amended. (BIR Rulings 163-94 dtd. Dec. 2, 1994 & UN 339-94 dtd. Dec. 6, 1994) HEISca 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 null and void. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group