BIR Ruling No. 071-12

February 10, 2012 BIR RULING NO. 071-12 E.O. 226 Banner Plasticard, Inc. Manggahan Light Industrial Park, Amang Rodriguez Ave., Bo. Manggahan 1611 Pasig City, Philippines Attention: Mr. Carlos N. Paderon Finance Manager Gentlemen : This refers to your letter dated September 2, 2011, requesting for a ruling stating that your sales to local customers/clients are not subject to 1% to 2% expanded withholding tax pursuant to E.O. 226. It is represented that on 20 June 2008, Banner Plasticard, Incorporated (BPI) was duly registered with the Board of Investment as a "New Export Producer of Plastic and Paper Card". As a BOI registered entity, BPI was granted Income Tax Holiday (ITH) from its Export Activity. In reply, please be informed that it is explicitly provided for in paragraph (7) (a) of the Specific Terms and Conditions imposed by the BOI, to wit: "7. The firm shall be entitled to the following incentives: HaSEcA a. Income Tax Holiday for four (4) years from June 2008 or actual start of commercial operation whichever is earlier but in no case earlier than the date of registration. The ITH incentives shall be limited only to the revenues generated from this new activity . xxx xxx xxx" (underscoring supplied) In relation thereto, please note that it is plainly indicated on page one (1) of the aforementioned Specific Terms and Conditions that BPI's Type of Registration/Activity is "Export Activity". Consequently, your request for a ruling to the effect that your sales to local customers/clients are not subject to 1% to 2% expanded withholding tax is denied for lack of legal basis. Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue