BIR Ruling No. 372-11

October 14, 2011 BIR RULING NO. 372-11 E.O. 226; RR 2-98; BIR Ruling No. DA-376-2004; BIR Ruling No. DA-396-2007 Tacloban Oil Mills, Inc. Brgy. Opong, Tolosa Leyte Attention: Clarabelle Sio Dy Corporate Secretary Gentlemen : This refers to your letter dated 17 November 2010 requesting for the extension of your company's exemption from payment of creditable withholding tax on income payments received. Documents submitted disclosed that Tacloban Oil Mills, Inc. (TOMI) with Tax Identification Number 006-167-917 is registered with the Board of Investments (BOI) as a New Domestic Producer of Coconut Oil and Copra Cake under Certificate of Registration No. 2006-100 dated August 29, 2006; that it was granted an Income Tax Holiday (ITH) on its sale from activities registered with the BOI for a period of four (4) years from January 2007; and that it was issued a ruling by the Bureau of Internal Revenue (DA-396-07) dated 20 July 2007 granting the company exemption from payment of creditable withholding tax on income payments received for said four year period. Additional documents submitted disclosed that the BOI approved an extension of your company's ITH for the period of 1 January 2011 to 31 December 2011. In reply, please be informed that Sec. 2.57.5 (B) (2) of Revenue Regulations No. 2-98, as amended, provides that the withholding tax therein prescribed shall not apply to income payments made to corporations registered with the BOI and enjoying exemption from the payment of income taxes pursuant to the provisions of Executive Order (EO) No. 226 or the "Omnibus Investments Code of 1987", as amended. Considering that you are a BOI-registered corporation granted by the BOI with an extension of your ITH incentive for an additional period of one (1) year, the income payments received by your corporation in connection with your BOI-registered activities during said extended ITH period from 1 January 2011 to 31 December 2011 shall not be subject to creditable withholding tax prescribed by Revenue Regulations No. 2-98, as amended; provided however that the BOI conditions for the grant of the extension of the ITH incentives are met during the said period (BIR Ruling No. DA-376-2004 dated July 6, 2004). However, you are required to withhold the tax on compensation income of your employees and the withholding tax on income payments to persons subject to income tax pursuant to Sec. 57 of the Tax Code of 1997, as amended. AIHDcC This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue