ACM Landholdings, Inc.

July 6, 2009 BIR RULING [DA-(IL-015) 347-09] E.O. 226; DA-456-07 ACM Landholdings, Inc. 5th Floor CSJ Building 105 Aguirre Street, Legaspi Village Makati City Attention: Ms. Gemma C. Sulapas PRE Devt. Head Gentlemen : This refers to your letters dated June 30, 2009 requesting for a ruling on the tax consequence of the Income Tax Holiday (ITH) granted to ACM Landholdings, Inc. by the Board of Investments (BOI) under Executive Order (E.O.) No. 226 otherwise known as the Omnibus Investments Code of 1987, for a period of four (4) years from start of commercial operations/selling. It appears that ACM Landholdings, Inc. is registered with the BOI as a New Developer of Low-Cost Mass Housing Project (Richmond Park Townhomes Gen. Trias, Cavite) on a Non-Pioneer status. It is the developer of the following mass housing projects located at Gen. Trias, Cavite, namely: Project Name Location Date of BOI Start of Commercial Registration Operation/ITH Richmond Park Gen. Trias, December 28, 2007 December 28, 2007 Townhomes Cavite that you offer to your buyers a financing package through PAG-IBIG, GSIS, Banks and other Financial Institutions with a term range of 5 to 15 years to pay; that during the 4-year period, you will receive full payment of the housing units from the financing institutions upon completion of the documentary requirements including the contract to sell within the four (4) years period; that since the company was paid in full, sale must be recognized in your books to avail of the tax holiday granted by the BOI; and that the Deed of Absolute Sale in favor of the buyers will be executed only upon the buyer's full payment of the loan to financing institution, which may be after 5 to 15 years or more. HTCISE In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, implementing Section 57 (B) of the Tax Code of 1997, the withholding tax prescribed in the said Regulations shall not apply to income payments to persons enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. (BIR Ruling No. DA-072-98 dated March 11, 1998) Accordingly, since ACM Landholdings, Inc. 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 4 years, this Office is of the opinion, as it hereby holds, that it is exempt from the payment of the creditable withholding tax imposed under Revenue Regulations No. 2-98, on income payments received by it during the aforementioned period with respect to its registered activity, subject however to the condition that both the BOI General and Specific Terms and Conditions for the grant of ITH are met during the said period. ASICDH This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service