BOI-registered Pioneer Firm Exempt from the Payment of Creditable Withholding Tax

December 29, 1994 BIR RULING NO. 186-94 50 (b) 000-00 186-94 Toyota Autoparts Philippines, Inc. Barangay Pulong Sta. Cruz Sta. Rosa, Laguna 4026 Attention: Mr . Tomoyuki Asano Treasurer/Comptroller Gentlemen : This refers to your letter dated October 5, 1994 stating that you are a BOI-registered pioneer firm which manufactures automotive transmissions for the commercial vehicle requirement of Toyota Motor Philippines Corporation (TMPC),one of the top 5,000 Philippine corporations, and for the export market comprising the Asean Brand to Brand Complementation (ABBC) program; and that as a BOI registered firm, you enjoy, among others, an income tax holiday for a period of six (6) years from September 1992, the start of your commercial operations. Based on the foregoing representations, you are now requesting exemption from the payment of the 1% creditable withholding tax prescribed under Section 1(n) of Revenue Regulations No. 12-94. In reply, please be informed that under Section 4(b)(2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, implementing Section 50(b) of the Tax Code, as amended, the withholding tax prescribed in the Regulations shall not apply to income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of the Omnibus Investments Code of 1987, as amended. Accordingly, and since you are registered with BOI and enjoying exemption from the payment of income taxes for a period of six (6) years from September 1992 until calendar year 1998 in accordance with the provisions of the Omnibus Investments Code of 1987, this Office is of the opinion, as it hereby holds, that you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, on income payments received by your company from September 1992 to calendar year 1998. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue