Laguna Technopark, Inc. Need Not Pay the Creditable Withholding Tax on the Sale of Its Industrial Lots During the Years that It is Enjoying an Income Tax Holiday

October 4, 1991 BIR RULING NO. 206-91 50 (b) 000-00 206-91 Gentlemen : This refers to your letter dated March 26, 1991 requesting for an issuance of a tax clearance exempting you from the creditable withholding tax of 2.5% on the sale of your industrial lots. It is represented that on October 19, 1990, Laguna Technopark, Inc. (formerly, Ayala Land, Inc.) was registered with the Board of Investments (BOI) as a new developer of a two hundred nineteen hectare industrial estate in Sta. Rosa and Bian, Laguna; that as such enterprise, it was granted by the Board of Investments an income tax holiday for a period of four (4) years which shall be reckoned from the start of commercial operation of its Phase I Project or from the actual start of selling of the lots under Phase I, whichever comes first, but in no case shall the period start earlier than the date of registration of the whole project; that accordingly, Laguna Technopark, Inc. (LTI) has commenced its commercial operation of Phase I last February 28, 1991; that February 28, 1991 is also the date that the enterprise started selling industrial lots; that as a consequence of such sale, the Revenue District Officer of Calamba, Laguna has required the presentation of a certification of tax exemption on the 2.5% creditable withholding tax before any Certificate Authorizing Registration (CAR) with the Register of Deeds would be issued by him. In reply, please be informed that while 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", such requirement does not apply to you during the period that you are enjoying the income tax holiday granted to you by BOI as a preferred non-pioneer industrial estate developer. Therefore, this Office hereby certifies that the Laguna Technopark, Inc. need not pay the creditable withholding tax on the sale of its industrial lots during the four years that said enterprise is enjoying an income tax holiday, effective February 28, 1991. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner