Central Plains Realty and Development Corporation

September 15, 2009 BIR RULING [DA-(IL-029) 546-09] E.O. 226; RR 2-98; DA-533-2006 Central Plains Realty and Development Corporation 75-D 18th Floor Avenue, Cubao, Quezon City Attention: Ma. Celeste C. Mutuc CEO & Treasurer Gentlemen : This refers to your letter dated January 5, 2009 requesting for a ruling that the income payments to Central Plains Realty and Development Corporation are not subject to creditable withholding tax pursuant to Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended. It is represented that Central Plains Realty and Development Corporation is duly registered with the Board of Investments (BOI) under Certificate of Registration No. 2008-297 dated October 30, 2008; that it is registered as a New Developer of Low-Cost Mass Housing Project of Creekstone Subdivision, along McArthur Highway, Iba O'Este, Calumpit, Bulacan on a Non-Pioneer Status; that the company started commercial operation/selling in 2009; and that it is entitled to an income tax holiday (ITH) for a period of four (4) years from 2009 or actual start of commercial operations/selling, whichever is earlier, but in no case earlier than the date of registration. In reply thereto, please be informed that Section 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended, is explicit in its provisions that the expanded withholding tax does not apply to income payments to persons enjoying exemption from the payment of income taxes pursuant to the provisions of any law, general or special. BOI-registered enterprises enjoy exemption from payment of income taxes pursuant to the provisions of Section 39 (a) (1) of the Omnibus Investments Code of 1987, such as the income tax holiday. CaEIST Such being the case, Central Plains Realty and Development Corporation being a BOI-registered enterprise enjoying income tax holiday under a special law is exempt from the creditable withholding tax on income generated from the abovementioned project. (BIR Ruling No. DA-533-2006 dated September 4, 2006 citing BIR Ruling No. DA-089-05 dated March 14, 2005) 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service