AGM Packaging System Ltd. Corp.

July 17, 2008 BIR RULING [DA-(IL-007) 054-08] RR 2-98; BIR Ruling No. DA-242-03 AGM Packaging System Ltd. Corp. Bormaheco Warehouse, Block 18, Lot 1 & 3, Road J. cor. 9th St. Phase III, Cavite Economic Zone Rosario, Cavite Attention: Mr. Rommel Galarse Operation Manager Gentlemen : This refers to your letter dated April 18, 2008 requesting for a certification that AGM Packaging System Ltd. Corp. ("AGM" for brevity) is exempt from the payment of creditable expanded withholding tax prescribed under Revenue Regulations (RR) No. 2-98, as amended on account of its registration with the Philippine Economic Zone Authority (PEZA). SECATH Documents show that AGM is a corporation duly registered with the PEZA, as an "Ecozone Export Enterprise" on a non-pioneer status under PEZA Certificate of Registration No. 06-59 dated July 28, 2006, to engage in the manufacture of specialized wooden pallets. AGM has been granted a four-year income tax holiday (ITH) incentive effective on the committed date of start of commercial operations or the actual date of start of commercial operations, whichever is earlier. In reply, please be informed that under Section 2.57.5 (B) (2) of 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 persons enjoying exemption from the income tax pursuant to the provisions of any law, general or special. SCaITA Accordingly, since AGM is a PEZA-registered enterprise, enjoying a four-year ITH, income payments made to it in respect to its registered activity shall not be subject to 2% expanded creditable withholding tax prescribed in RR No. 2-98, as amended, for a period of four (4) years from the committed date of start of commercial operations or the actual date of start of commercial operations, whichever is earlier. 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. TaDSHC Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service