Universal Harvester, Inc.

October 15, 2008 BIR RULING [DA-(IL-027) 296-08] DA101-06 Universal Harvester, Inc. Suite 306, The Bonaventure Plaza Ortigas Avenue, Greenhills San Juan, Metro Manila Attention: Mr. William Y. How President Gentlemen : This refers to your letter dated September 16, 2008 stating that your company, Universal Harvester, Inc., is a Philippine Export Processing Zone (PEZA) registered enterprise with Registration Certificate No. 2008-860; that it is engaged in the manufacture of potassium sulfate and hydrochloric acid; that it is enjoying an income tax holiday (ITH) for a period of four (4) years for original project effective on the committed date of start of commercial operations, or the actual date of start of commercial operations, whichever is earlier; and that the ITH entitlement for the original project can also be extended for another three (3) years provided specific criteria are met for each additional year and prior PEZA approval is obtained. Based on the foregoing representations, you now request for exemption from the payment of withholding tax pursuant to Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended. In reply thereto, please be informed that Section 2.57.5 of Revenue Regulations No. 2-98, as amended, provides: "SEC. 2.57.5. Exemption from Withholding. The withholding of creditable withholding tax prescribed in these Regulations shall not apply to income payments made to the following: (B) Persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special, such as but not limited to the following: xxx xxx xxx (2) Corporations registered with the Board of Investments and enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investment Code of 1987. cAHIaE SUCH BEING THE CASE, this Office holds that payments made by your customers are not subject to the creditable withholding tax pursuant to Section 2.57.5 of Revenue Regulations No. 2-98. 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 null and void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service