Mt. Holly Coco Industrial Co. Ltd.

March 30, 2009 BIR RULING [DA-(C-043) 173-09] Section 57 (B); DA-273-2006 Mt. Holly Coco Industrial Co. Ltd. 796 Gen. Luis St., Bo. Bagbaguin Caloocan City Attention: Darryl T. Go Managing Partner Gentlemen : This refers to your letter dated February 13, 2009, requesting a confirmatory ruling on your opinion that income payment made to Mt. Holly Coco Industrial Co., Ltd. is not subject to creditable withholding tax, pursuant to the Omnibus Investments Code of 1987. It is represented that Mt. Holly Coco Industrial Co. Ltd., (MHCICL, for short), with TIN: 241-784-044-001, is a domestic corporation registered with the Securities and Exchange Commission (SEC) on September 26, 2005; that likewise, it is registered with the Board of Investments as New Producers of Coco Methyl Ester (Biodiesel Fuel) and its By-products (Glycerin) on a non-pioneer status in accordance with the Omnibus Investments Code of 1987, on November 22, 2005, bearing BOI Reg. No. 2005-193; that as a BOI-registered entity, it is entitled to an Income Tax Holiday (ITH) for a period of four (4) years from October, 2006 or from actual start of commercial operations, whichever is earlier, but in no case earlier than the date of registration; that it started its actual operation on January 1, 2007; that MHCICL is engaged in the business of manufacturing Biofuel components, Virgin Coconut Oil and others that can be derived from but not limited to Coconut in accordance with Republic Act No. 9367, otherwise known as the BIOFUEL Law. In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended, implementing Section 57 (B) of the Tax Code of 1997, the withholding tax prescribed in the said Regulations shall not apply to income payments made to persons enjoying exemption from payment of income taxes pursuant to the provisions of any law (general or special) like the Omnibus Investments Code of 1987. SaITHC Accordingly, since MHCICL is a BOI-registered enterprise enjoying exemption from payment of income taxes pursuant to the provisions of Section 39 (a) (1) of the Omnibus Investments Code of 1987, income payments made to MHCICL in relation to its registered activity (Bio-diesel project) shall not be subject to expanded creditable withholding tax prescribed in Revenue Regulations No. 2-98, as amended, for a period of four (4) years beginning October, 2006 or from its actual commercial operation (January 1, 2007) whichever is earlier, but in no case earlier than the date of registration. (BIR Ruling No. 189-2000 dated March 30, 2000). 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. DHIaTS Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner