Wolfpac Mobile Inc.

July 15, 2008 BIR RULING [DA-(IL-005) 041-08] 57 (B); DA-387-2005 Wolfpac Mobile Inc. 6/F, The Peninsula Court 8735 Makati Avenue corner Paseo de Roxas Makati City Attention: Ms. Rina R. Manuel Senior Tax Manager Gentlemen : This refers to your letter dated January 23, 2007 requesting for confirmation of your opinion that Wolfpac Mobile Inc. (Wolfpac) is exempt from the withholding of creditable taxes prescribed under Revenue Regulations No. 2-98, as amended, on income payments received from its customers, both private and government entities. CHTAIc It is represented that Wolfpac is a domestic corporation registered with the Securities and Exchange Commission (SEC) and is engaged in the business of consumer mobile applications software development and consumer mobile content development and other allied services; that Wolfpac is registered with the Board of Investments (BOI) beginning February 13, 2004 as a non-pioneer enterprise under Executive Order No. 226 as a new IT service firm in the field of service provider application under the BOI-issued Certificate of Registration No. 2004-021; that moreover, under the terms of its registration, it is entitled to a certain tax and non-tax incentives, which include, among others, income tax holiday for four (4) years from February 2004; and that Wolfpac is a registered taxpayer with the Bureau of Internal Revenue Revenue District Office (RDO No. 050 with TIN number 227-124-281-000. In reply, please be informed that Section 2.57.5 (B) (2) of Revenue Regulations (RR) No. 2-98, as amended by RR No. 6-2001 and as further amended by RR No. 17-2003 implementing Section 57 (B) of the Tax Code, provides that the withholding tax prescribed in the said Regulations shall not apply to income payments to persons enjoying exemption from income tax pursuant to the provisions of Republic Act No. 7916 and the Omnibus Investments Code of 1987. DCHaTc Considering therefore, that Wolfpac is a BOI-registered enterprise enjoying ITH for a period of four (4) years reckoned from February 2004 which is the date specified under the Terms and Conditions of its Certificate of Registration in accordance with the provisions of Section 39 (a) (1) of E.O. 226, this Office is of the opinion as it hereby holds that it is exempt from the payment of creditable withholding tax prescribed in RR 2-98, as amended by RR Nos. 6-2001 and 17-2003 on income payments received during the ITH period, in connection with its registered activity. Consequently, as a New IT Service Firm in the Field of an Application Service Provider, and not being notified by the Commissioner of Internal Revenue that it belongs to the top 10,000 private corporations, Wolfpac is exempt from the provision of Section 3 (M) of RR No. 17-2003 which imposes upon the top ten thousand (10,000) private corporations the duty to withhold an equivalent of one percent (1%) creditable withholding tax on their income payments to their suppliers of goods and two percent (2%) to their suppliers of services. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall be disclosed that the facts are different, then this ruling shall be considered null and void. SHTEaA Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner