BIR Ruling No. 073-65

July 7, 1965 BIR RULING NO. 073-65 Messrs. Sabido, Sabido & Associates Suites 301-304 Phoenix Bldg. Intramuros, Manila Attention : Mr . Francisco L . Abalos Gentlemen : This refers to your request for a ruling on the following query: "'A corporation' is a holder of a Timber License Agreement for a forest concession granted by the Republic of the Philippines through the Secretary of Agriculture and Natural Resources for a period of 25 years. As such forest concessionaire it has constructed and is still constructing paved gravel main roads in said forest concession. The expenses of the construction of these paved gravel main roads are at present amortized for a period of 25 years. Considering that a majority of the stockholders of 'A corporation are U.S. citizens and are granted parity rights for the development of our natural resources up to July 3, 1974 only, will it be legal for said corporation to change its period of amortization up to July 3, 1974 only, instead of up to the expiration of the 25-year period of the Timber License Agreement?" In reply thereto, I have the honor to inform you that the corporation mentioned in your query may not change the period of amortization to cover the cost of the logging roads from the 25-year period to a period ending July 3, 1974, the termination of the parity right of the controlling stockholders, for there can be no certainty of the renewal of the corporation's timber license. Besides, the premise of the change is purely contingent, which may not arise as the American stockholders may choose to dispose of their stocks before the end of the original 25-year term of the timber license. cdt Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue