BIR Ruling No. 003-09

February 12, 2009 BIR RULING NO. 003-09 Sec. 188; 000-00 Sidel Sales and Conveyor Industries Philippines, Inc. Bldg. 8 & 9 Don Mariano Lim Industrial Complex Alabang-Zapote Road Almanza, Las Pias Attention: Mr. Romeo Sia Accounting Manager Gentlemen : This refers to your letter dated July 5, 2007 requesting for an extension of 60 days within which to file the short period return for the absorbed company relative to the merger effected on July 1, 2007, to be reckoned from July 31, 2007, the original due date for submission of the short period return, or until September 29, 2007. As represented, the Securities and Exchange Commission (SEC) had approved the merger of Sidel Technical Services Philippines, Inc. ("Sidel Technical" for brevity) with and into Sidel Conveying Philippines Corporation ("Sidel Conveying" for brevity) now known as Sidel Sales Conveyor Industries Philippines, Inc. Pursuant to the SEC-approved Plan of Merger, the merger took effect as of July 1, 2007, with Sidel Conveying as the surviving company. When the external auditors commenced the short period audit of Sidel Technical (the absorbed company) for purposes of preparing its short period financial statements to be attached to, and filed together with its short period return, the external auditors needed 90 days to finish the same. Hence, this request. In reply, please be informed that Section 188 of Revenue Regulations No. 2 provides "Section 188. Extension of time for filing returns. The Commissioner of Internal Revenue may, in meritorious cases, grant a reasonable extension of time for filing returns of income. Requests for such extension of time must be filed with the Bureau of Internal Revenue on or before the last day of the period for filing returns. Only the following reasons shall be considered as meritorious for which an extension may be granted: HTaIAC (a) Destruction of books of accounts and other records of the taxpayer through fire, flood or typhoon and the said books and other records are in the process of reconstruction; (b) Epidemic, pestilence or other calamities prevailing in specific sectors of the country where the taxpayer resides or where the principal business is being conducted. Sickness or illness of the accountant, bookkeeper or the manager or proprietor of the business shall not be considered a reasonable cause." SaTAED Since your reason for an extension of time within which to file your short period return is not one of those considered as meritorious under Section 188 of Revenue Regulations No. 2, this Office is constrained to deny your request. In view thereof, in case of your failure to file the return on the date prescribed under the Tax Code, you shall be imposed, in addition to the tax required to be paid, a penalty equivalent to twenty-five percent (25%) of the amount due and interest at the rate of twenty percent (20%) per annum, and such other penalties prescribed by rules and regulations and by the Tax Code of 1997, as amended. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Commissioner of Internal Revenue