DMCI Project Developers, Inc.

December 28, 2007 BIR RULING [DA-704-07] 57 (B), 196, 106; DA-630-2006 DMCI Project Developers, Inc. 3rd Floor, DMCI Plaza (East Wing) 2281 Don Chino Roces Ave. Makati City Attention: Ms. Evangeline Hernandez-Atchioco Deputy Director for Finance Gentlemen : This refers to your letter dated November 28, 2007 requesting in effect, for a ruling on the tax consequence of the Income Tax Holiday (ITH) granted to DMCI Project Developers, Inc. (DMCI-PDI) by the Board of Investments (BOI) under Executive Order (EO) No. 226 otherwise known as the Omnibus Investments Code of 1987, for a period of four (4) years from start of commercial operations/selling. TCSEcI Documents submitted show that DMCI-PDI is a real estate company, it is registered with the BOI as a New Developer of Mass Housing Projects on a Non-Pioneer status. It is the developer of the following mass housing ventures, namely: Project Location No. of Date of BOI Registration Housing Units Registration No. Raya Garden Merville, 252 December 5, 2006 2006-154 (Medium Rise) Paraaque City Rosewood Taguig City 744 February 15, 2007 2007-023 Pointe Raya Garden Merville, 651 July 5, 2007 2007-117 (High Rise) Paraaque City Cypress Taguig City 793 August 3, 2007 2007-138 Towers Pursuant to the Specific Terms and Conditions of its Certificate of Registration for Raya Garden Condominiums (Medium Rise), DMCI-PDI is entitled to an ITH for a period of 4 years from November 2006, for Rosewood Pointe, you were granted a 4 year ITH from January 2007, for Raya Garden (High Rise), your entity is permitted an ITH for a period of 4 years from June 2007, for Cypress Towers, DMCI-PDI was allowed a 4 year ITH from June 2007, or from the actual start of its commercial operations/selling, whichever is earlier, but in no case earlier than their corresponding dates of registration. DMCI-PDI is limited only to the revenue generated from its registered activities. You had been engaged in delivering mass housing projects to the public for quite a long time, and your inclusion in BOI's investment priorities plan or IPP as a registrable activity enabled your company to offer products in a much lower price and increase sales volume. In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations (RR) 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. (BIR Ruling No. DA-072-98 dated March 11, 1998) AIcaDC Accordingly, since DMCI-PDI is a BOI-registered enterprise, enjoying exemption from the payment of income taxes pursuant to the provisions of Section 39 (a) (1) of the Omnibus Investments Code of 1987 for a period of 4 years from the foregoing dates of its start of commercial operations/selling, but in no case earlier than their respective dates of registration, this Office hereby holds, that DMCI-PDI 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 with respect to its registered activity, subject however to the condition that both the BOI General and Specific Terms and Conditions for the grant of ITH are met during the said period. 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. AcSEHT Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service