Prohomes Development Corporation

February 2, 2009 BIR RULING [DA-(IL-001) 051-09] E.O. 226; RR 2-98; BIR Ruling No. DA-425-07 Prohomes Development Corporation Unit 203, 2nd Floor FGU Bldg., Biliran Road Cebu Business Park, Ayala, Cebu City Attention: Ms. Beverly M. Dayanan President Gentlemen : This refers to your letter dated November 3, 2008 requesting for exemption from income and expanded withholding taxes since Prohomes Development Incorporation ("PDI" for brevity) is entitled to income tax holiday (ITH) on account of its registration with the Board of Investments (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987". cCESTA Documents show that PDI is duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CS200430279 dated December 21, 2004. Its primary purpose is "to operate and develop residential or commercial building, acquire, buy, own, hold, sell, assign, mortgage, lease, manage, enter joint venture, operate and develop agricultural, residential, industrial, eco-tourism and plants project, plantations or any business devoted to do any and everything necessary, suitable and proper for the accomplishment, of any of the projects or for the furtherance of any of the powers herein set forth." It is also registered with the Board of Investments as a "a New Developer of Mass Housing Project on a non-pioneer status under Certificate of Registration No. VII 2007-140 dated August 9, 2007. PDI has been granted a four-year ITH from January 2008 or from the actual start of commercial operations/selling, whichever is earlier but in no case earlier than the date of registration. PDI was given by the Housing and Land Use Regulatory Board (HLURB) a License to Sell on the saleable lots/units of its project, the Genesis Subdivision, located at Basak, Lapu-lapu City, Cebu, under License to Sell No. 17075 dated November 20, 2006. In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations (RR) No. 2-98, as amended, implementing Section 57 (B) of the Tax Code of 1997, as amended, the withholding tax prescribed in the said Regulations shall not apply to income payments to person enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. Accordingly, since PDI 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 for a period of four (4) years reckoned from January 2008, this Office is of the opinion as its hereby holds, that PDI is exempt from the payment of the creditable withholding tax imposed under RR 2-98, as amended, on income payments received by it during the aforementioned period with respect to its registered activity. (BIR Ruling No. DA-425-2007 dated July 27, 2007) 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 as null and void. SDHAcI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service