Tax Exemption Privileges--BDDC

November 3, 1981 BIR RULING NO. 212-81 24-a 000-00 212-81 Santiago, Sison & Associates 106 Paseo de Roxas Makati, Metro Manila Attention: Atty . Priscilla R . Gonzales Special Counsel Gentlemen : This refers to your letter dated January 7, 1981, requesting clarification of the tax exemption privileges of your client, Basin Dredging and Development Corporation (BDDC). It is represented that your client, a corporation duly organized in accordance with the law of the Philippines, is a subsidiary of the Leyte Sab-A Basin Development Authority, a government-owned and controlled corporation created and existing under and by virtue of Presidential Decree No. 625, Section 26 of which provides: Sec. 26. Exemption from Taxes . The Authority and its subsidiaries shall be exempt from all taxes, licenses, fees and duties to the following extent: xxx xxx xxx "(b) With respect to all transactions, properties, effects accruing, pertaining or attributable to subsidiaries, to the extent allowed to pioneer enterprises registered under Republic Act No. 5186, as amended, otherwise known as the Investment Incentives Act. " In reply, I have the honor to inform you as follows: 1. Your client, being a subsidiary of the Leyte Sab-A Basin Development Authority, is exempt from all taxes under the National Internal Revenue Code, except income tax, on a diminishing scale as provided in Section 8(a) of Republic Act No. 5186. Since it is a corporation organized under the general provisions of the corporation law, it is not affected by Presidential Decree No. 1177 withdrawing the tax exemption on its principal, the Leyte Basin which is a government-owned and controlled corporation. (Opinion No. 153, Series 1978, Minister of Justice.) 2. The exemption can be availed of from the date it started engaging in business covered by the tax exemption. 3. The exemption letter is not required every time a transaction covered by the exemption is effected. Very truly yours, RUBEN B. ANCHETA Acting Commissioner