Request for Exemption from the 5% Creditable Expanded Withholding Tax of the Rental Payments made by Investors to SBMA

October 12, 1995 BIR RULING NO. 155-95 6-85 000-00 155-95 Subic Bay Metropolitan Authority Building 229 Waterfront Road Subic Bay Free Port Zone 2222 Philippines Attention: Ms . Armin Raquel-Santos Deputy Administrator for Finance Gentlemen : This refers to your letter dated June 7, 1995, requesting exemption from the 5% creditable expanded withholding tax of the rental payments made by investors to Subic Bay Metropolitan Authority (SBMA) In reply, please be informed that Section 4(b) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, is explicit in its provisions that the withholding tax therein prescribed shall not apply to income taxes pursuant to the provisions of any law, general or special . . .. "Pursuant to Section 12(c) of R.A. No. 7227, otherwise known as the Bases Conversion and Development Act of 1992, SBMA shall be liable to the payment of the preferential rate of 3% plus the amounts equivalent to 1% for Local Government. Units and 1% for Special Development Fund, based on its gross income earned, in lieu of local and national internal revenue taxes . (Emphasis ours) Such being the case, the since SBMA is enjoying exemption from income tax by virtue of the aforecited provision, its rental income shall be exempt from the 5% creditable expanded withholding tax imposed under Section 1 (c)(1) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 8-90. This serves as your certification that the rental payments to you are not subject to the expanded withholding tax. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue