SGV & Co.

July 30, 2009 BIR RULING [DA-(TAR-006) 417-09] Section 46, 47; DA-110-2007; DA-107-2008 SGV & Co. 6760 Ayala Avenue 1226 Makati Attention: Atty. E. C. Alcantara Co-Head, Tax Services Gentlemen : This refers to your letter dated June 15, 2009 requesting on behalf of your client, Adebe Realty Company, Inc. ("Adebe"), for authority to change its accounting period from calendar year to fiscal year beginning July 1 and ending in June 30 of the following year. It is represented that Adebe is a domestic company with TIN 000-224-814-000 and principal office address at 7th Floor ODC International Plaza Bldg., 219 Salcedo St., Legaspi Village, Makati City; that it currently adopts a calendar year both for tax and financial accounting purposes; and that for purposes of convenience in the preparation of its financial statements and to align its accounting period with the accounting period of its affiliates, Adebe would change its accounting period from calendar year to fiscal year beginning July 1 and ending in June 30 of the following year. In reply, please be informed that your request is hereby granted, provided, that Adebe complies with the provisions of Sections 46 and 47 of the Tax Code of 1997 which state: ASIETa "SEC. 46. Change of Accounting Period. If a taxpayer, other than an individual, changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year or from fiscal year to another, the net income shall, with the approval of the Commissioner, be computed on the basis of such new accounting period, subject to the provisions of Section 47." "SEC. 47. Final or Adjustment Returns for a Period of less than Twelve (12) Months. (A) Returns for Short Period Resulting from Change of Accounting Period. If a taxpayer other than an individual, with the approval of the Commissioner, changes the basis of computing net income from fiscal year; to calendar year, a separate final or adjustment return shall be made for the period between the close of the last fiscal year for which return was made and the following December 31. If the change is from calendar year to fiscal year, a separate final or adjustment return shall be made for the period between the close of the last calendar year for which return was made and the date designated as the close of the fiscal year. If the change is from one fiscal year to another fiscal year, a separate final or adjustment return shall be made for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year. (B) Income Computed on Basis of Short Period. Where a separate final or adjustment return is made under Subsection (A) on account of a change in the accounting period, and in all other cases where a separate final or adjustment return is required or permitted by rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, to be made for a fractional part of a year, then the income shall be computed on the basis of the period for which separate final or adjustment return is made." Accordingly, Adebe should file a separate final or adjustment return for the period corresponding to January 1 and June 30, 2009, which is the period between the close of the calendar year for which a return was made and the date designated as the close of the fiscal year. Said return should be filed on or before October 15, 2009 and the tax due thereon, if any, be paid at the time of filing. (BIR Ruling No. DA-110-2007 dated February 19, 2007) This will serve as Adebe's authority to change its accounting period from calendar year to fiscal year beginning July 1 and ending in June 30 of the following year upon its compliance with the requirement of filing a short period return. (BIR Ruling No. DA-107-08 dated February 22, 2008) 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