BIR Ruling [DA-631-99]

November 9, 1999 BIR RULING [DA-631-99] United Pulp and Paper Co., Inc. PHINMA Building 5/F, 166 Salcedo Street 1229 Makati City Attention: Mr . Efren C . Buenaventura Chief Accountant Gentlemen : This refers to your letter dated September 15, 1999 requesting for a Tax Exemption Certificate pursuant to Revenue Regulations No. 2-98 on account of your registration with the Board of Investment (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987." It is represented that United Pulp and Paper Co., Inc. is a domestic corporation organized and existing under the laws of the Philippines with principal office address at 5th Floor Phinma Bldg., 166 Salcedo St., San Lorenzo Village, Makati City engaged in the manufacture of multi- wall sackraft paper, corrugating medium and WPP lining paper; that it has been registered with the Board of Investments per Certificate of Registration No. DP 97-164 dated July 22, 1997 on a non-pioneer status as expanding producer of paper products; and that you are entitled to an Income Tax Holiday of three (3) years pursuant to No. 5(a) of the Specific Terms and Conditions accompanying your Certificate of Registration, viz: LexLib "6. The enterprise shall be entitled to the following incentives: a. Income Tax Holiday for three (3) years from the start of commercial operation on January 1999 or the actual start of commercial operation, whichever comes first, but in no case earlier than the date of registration; The base figure of P716, 494, 401, which is the highest sales attained for the past three (3) years prior to its registration shall be used in the computation of ITH. Date of Filing : Within one (1) month from filing of the final ITR with BIR" In reply, please be informed under Section 2.57.5(B)(2) of Revenue Regulations No. 2-98, implementing Section 57(B) of the Tax Code of 1997, the withholding tax prescribed in the said Regulations shall not apply to income payments to persons enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. Accordingly, since the United Pulp and Paper Co., Inc. is a BOI-registered enterprise enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a)(1) of the Omnibus Investment Code of 1987, for a period of three (3) years reckoned from the start of its commercial operation, this Office is of the opinion, as it hereby holds, that is exempt from the payment of the creditable withholding tax imposed under Revenue Regulations No. 2-98, on income payments received by it during the aforementioned period. (BIR Rulings No. 020-95 dated February 13, 1995) 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, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)