Gateway Property Holdings - Subject to CWT

January 22, 1993 BIR RULING NO. 049-93 GATEWAY PROPERTY HOLDINGS SUBJECT TO CWT 50 (b) 000-00 049-93 Bautista Picazo Buyco Tan & Fider Law Offices 9th Floor, Singapore Airlines Building 138 de la Costa Street Salcedo Village, Makati, M.M. Attention: Atty . Ma . Yumina L . Francisco This refers to your letter dated May 28, 1991 requesting for a confirmation of the opinion that your client, GATEWAY PROPERTY HOLDINGS, INC. (GPHI), in the light of the four-year income tax holiday granted to it by virtue of its registration with the Board of Investments, is not covered by the provisions of Revenue Regulations No. 1-90 prescribing withholding tax on sale of real property. cdt It is represented that Gateway Property Holdings, Inc. is a duly organized and existing domestic corporation engaged in the development of industrial estates; that it expects to derive revenues primarily from the sale of lots at the Gateway Business Park which it owns and has developed into an industrial estate; that GPHI is registered with the BOI as a new developer of industrial estate, on a preferred non-pioneer status, under the Omnibus Investments Code of 1987; that as such, that GPHI is entitled to income tax holiday for a period of four (4) years from the start of commercial operation in March 1991. In reply, please be informed that Revenue Memorandum Circular No. 7-90 dated January 16, 1990, provides that "all sales, exchanges or transfers of real properties (whether classified as ordinary or capital asset) by corporations, consummated on or after January 1, 1990, are subject to the creditable withholding tax". Moreover, the grant of preferential tax treatment under Article 39(a)(1) of the Omnibus Investments Code would only apply to pioneer and non-pioneer registered enterprises that are producers, manufacturers or processors. Therefore, this Office is of the opinion as it hereby holds that the GATEWAY PROPERTY HOLDINGS, INC. is subject to the creditable withholding tax on any sale, exchange or transfer of its industrial lots. JOSE U. ONG Commissioner of Internal Revenue