Palawan Power Generation, Inc.

December 16, 2009 BIR RULING [DA-(C-320) 787-09] Section 57 (B); RR 2-98; DA-376-2004 dtd 7/6/04 Palawan Power Generation, Inc. Unit 2, 2F 9th Avenue Bonifacio Global City Taguig City Attention: Maria Theresia N. Delena Finance and Administration Manager Gentlemen : This refers to your letter dated November 27, 2009 requesting for exemption from creditable withholding tax on income payments made to Palawan Power Generation, Inc. Documents submitted disclosed that Palawan Power Generation, Inc. is registered with the Board of Investments (BOI) under the following registrations: 1. Certificate of Registration No. 2009-16 dated July 22, 2009 as a New Operator of the 14 MW Puerto Princesa Diesel Power Plant Project (Power Generation Project under SPUG); and 2. Certificate of Registration No. 2009-17 dated July 22, 2009 as a New Operator of the 5 MW Narra Power Plant Project (Power Generation Project under SPUG). Both projects are on a Non-Pioneer Status under the Omnibus Investments Code of 1987 (Executive Order No. 226) and it was granted an Income Tax Holiday (ITH) for four (4) years from January 2010 for the 14 MW Puerto Princesa Diesel Power Plant Project and for four (4) years from March 2010 for the 5 MW Narra Power Plant Project, or actual start of commercial operations/selling, whichever is earlier but in no case earlier than the date of registration. DHaECI 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 payment of income taxes pursuant to the provisions of the Omnibus Investment Code of 1987, as amended. Considering that you are a corporation registered with the BOI and enjoying exemption from the payment of income taxes for the periods covered by your Certificates of Registration pursuant to the provisions of Article 39 (a) (1) of the Omnibus Investments Code of 1987, the income payments made by your suppliers in connection with your BOI-registered activities during the ITH periods, shall not be subject to creditable withholding tax prescribed by Revenue Regulations No. 2-98, as amended. (BIR Ruling No. DA-376-2004 dated July 6, 2004 citing BIR Ruling No. 163-94 dated December 2, 1994). 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service