Fiesta Communities, Inc.

December 9, 2009 BIR RULING [DA-(IL-042) 760-09] RR 2-98, as amended; DA(IL-028) 527-09 Fiesta Communities, Inc. HLDC Corporate Center 43-35 Don Bonifacio Avenue Pulung Maragul, Angeles City Attention: Christopher Ryan T. Tan General Counsel Gentlemen : This refers to your letter dated October 14, 2009 requesting for exemption from income and creditable withholding taxes under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987". Documents submitted show that Fiesta Communities, Inc. is duly registered with the Board of Investments (BOI) under Certificate of Registration No. 2009-122 dated September 18, 2009 as New Developer of Low-Cost Mass Housing Project on a non-pioneer status; that Fiesta Communities, Inc. has been granted Income Tax Holiday (ITH) for four (4) years from September 2009 or actual start of commercial operations/selling whichever is earlier but in no case earlier than the date of registration; and that the ITH shall be limited only to the revenue generated from its registered activity (Fiesta Communities Mabalacat-Brgy. Tabun, Mabalacat, Pampanga). In reply, please be informed that 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 person enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. Accordingly, since Fiesta Communities, 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 September 2009, this Office is of the opinion as it hereby holds, that HDC is exempt from the payment of the creditable withholding tax imposed under RR 2-98, as amended, on income payments received by it during the aforementioned period with respect to Fiesta Communities Mabalacat-Brgy. Tabun, Mabalacat, Pampanga project. cASEDC 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