BIR Ruling [DA-659-99]

November 29, 1999 BIR RULING [DA-659-99] 112 (A) DA-248-A-99 Balmeo Bautista & Peasales Law Offices Rm. 309 Margarita Building J. P. Rizal cor. Cardona Streets Makati City Attention: Atty. Leonides F. Balmeo Gentlemen : This refers to your letters dated November 26 & 29, 1999 stating that Luzon Hydro Corporation, a zero rated company applied for and was granted a tax credit in the amount of P64,436,867.45 more or less by the Revenue Region No. 1, Revenue District Office No. 2, Vigan, Ilocos Sur; that the said tax credit cannot be utilized by Luzon Hydro Corporation because its commercial operations will start only around the year 2001; that it needs cash but does not want to claim a refund although under the Tax Code, it is entitled to do so; and that it therefore opted to get said cash from its sister companies i.e. Davao Light & Power Co., Inc. and Pilmico Foods Corporation which agreed to reimburse the amount of tax credits that have been assigned to them by Luzon Hydro Corporation. Based on the foregoing, you now request for a confirmation of the validity of the transfer of the tax credit by Luzon Hydro Corporation to Davao Light & Power Co., Inc. and Pilmico Foods Corporation and that this Office can issue the TCC directly to the assignees. In reply thereto, please be informed that in BIR Ruling No. DA-248-A-99, dated April 23, 1999 issued in your favor involving the same corporation and the same assignees, this Office held that tax credit can be legally assigned by a taxpayer to its contractors, sister companies, affiliates, parent companies and to third parties. Based on the said ruling, Luzon Hydro Corporation is qualified and can validly transfer its tax credit to Davao Light & Power Co., Inc. and Pilmico Foods Corporation and that this Office can issue the TCC directly to the assignees. Accordingly, your request is hereby confirmed. ICAcHE 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.) BEETHOVEN L. RUALO Commissioner of Internal Revenue