Playa Asya Resort, Inc.

July 13, 2009 BIR RULING [DA-(IL-020) 370-09] BIR Ruling No. DA-349-04 & DA-279-05 Playa Asya Resort, Inc. Suite 904 Liberty Center 104 Dela Costa St. Salcedo Village, Makati City Attention: Ms. Rhyl I. Casoy Finance Officer Gentlemen : This refers to your letter dated September 1, 2008 requesting for a ruling that since Playa Asya Resort, Inc. is entitled to Income Tax Holiday, it is, therefore, not subject to expanded withholding tax during the period of income tax holiday (ITH). IDEScC Documents show that Playa Asya Resort, Inc. (trade name "Asya Boracay"), with Taxpayer Identification No. 229-732-901-000, is registered with the Board of Investments as a "New Operator of Tourist Accommodation Facility ("AAA" Class Resort) on a non-pioneer status under Certificate of Registration No. 2005-195 dated November 22, 2005. Playa Asya Resort, Inc. has been granted a four-year income tax holiday incentive from December 2005 or actual start of operations, whichever is earlier, but in no case earlier than the date of registration. It started commercial operations on December 1, 2005. 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 persons enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. Accordingly, since Playa Asya Resort, 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 four (4) years reckoned from December 1, 2005, this Office is of the opinion as it hereby holds, that it is exempt from the payment of the creditable withholding tax imposed under RR No. 2-98, as amended, on income payments received by it during the aforementioned period with respect to its registered activity. 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. cCEAHT Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service