Igloo Storage Complex Corporation

October 13, 2009 BIR RULING [DA-(IL-031) 598-09] E.O. 226; RR 2-98; DA-396-07; DA-376-2004; 163-94; DA-425-2007; DA-231-02; UN-339-94 & DA-231-02 Igloo Storage Complex Corporation 96 Gov. M.C. Cuenco Avenue Banilad, Cebu City Attention: Mr. Celso Z. Arjona Finance & Admin. Mgr. Gentlemen : This refers to your letters dated August 11, 2008 and February 23, 2009 requesting exemption from the payment of creditable withholding tax on income payments made to Igloo Storage Complex Corporation ("ISCC"), derived by it on its rental services of cold storage facility under the Omnibus Investments Code of 1987 (Executive Order (E.O.) No. 226), pursuant to Revenue Regulations (RR) No. 2-98, as amended. DcCASI It is represented that ISCC is a domestic corporation registered with the Board of Investments (BOI) as a new operator of cold storage facility on a non-pioneer status under Certificate of Registration No. XI 2006-104 dated September 4, 2006; and that it was granted an income tax holiday (ITH) for four (4) years reckoned from February 2007. In reply thereto, please be informed that Section 2.57.5 (B) (2) of RR No. 2-98, as amended, provides that the withholding tax therein prescribed shall not apply to income payments made to corporations registered with the BOI and enjoying exemption from the payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. Considering that ISCC is a corporation registered with the BOI and enjoying exemption from the payment of income taxes pursuant to the provisions of Article 39 (a) (1) of the Omnibus Investments Code of 1987, as amended, the income payments made to it on the rentals of its cold storage facility during the ITH, shall not be subject to creditable withholding tax prescribed under RR No. 2-98, as amended. (BIR Ruling Nos. DA-396-07 dated July 20, 2007, DA-376-04 dated July 6, 2004, 163-94 dated December 2, 1994, DA-425-07 dated July 27, 2007, DA-231-02 dated December 3, 2002, DA-418-04 dated August 8, 2004, UN-339-94 dated December 6, 1994, and DA-231-02 dated December 3, 2002) It is understood, however, that only sales generated from registered activity shall be entitled to ITH. Hence, only income payments derived from registered activity are exempt from creditable withholding tax. 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.) GREGORIO V. CABANTAC Deputy Commissioner