Johndorf Ventures Corp.

April 29, 2009 BIR RULING [SH-(033) 294-09] E.O. 226; RR 2-98; BIR Ruling No. DA-425-07 Johndorf Ventures Corp. 2/F, Ayala Life FGU Building, Biliran Road Cebu Business Park, Ayala, Cebu City Attention: Ms. Beverly M. Dayanan Executive Vice-President Gentlemen : This refers to your letter dated April 14, 2009 requesting, in effect, for exemption from income and expanded withholding taxes since Johndorf Ventures Corporation ("JVC" for brevity) is entitled to income tax holiday (ITH) on account of its registration with the Board of Investments (BOI) under Executive Order No. 226, otherwise known as the "Omnibus Investments Code of 1987". Documents submitted show that JVC is registered with the BOI as a "New Developer of Low-Cost Mass Housing Project",on a non-pioneer status under Certificate of Registration No. 2009-007 dated January 22, 2009 for its project the Bellevue, located in Upper Carmen, Cagayan de Oro City. JVC has been granted a four-year ITH from January 2009 or from the actual start of commercial operations/selling, whichever is earlier but in no case earlier than the date of registration. The above project of JVC is registered with the Housing and Land Use Regulatory Board (HLURB) under Certificate of Registration No. 18906. JVC was given by the HLURB a License to Sell on the saleable lots/units in Bellevue, under License to Sell No. 19852 dated September 22, 2008. The maximum selling price per house and lot package is P1,250,000.00, and P500,000.00 per lot only. In reply, please be informed that under Section 2.57.5 (B) (2) of Revenue Regulations (RR) No. 2-98, as amended, implementing Section 57 (B) of the Tax Code of 1997, as amended, the withholding tax prescribed in the said Regulations shall not apply to income payments to person enjoying exemption from the income tax provided by Republic Act No. 7916 and the Omnibus Investments Code of 1987. HTCaAD Accordingly, since JVC is a BOI-registered enterprise, enjoying exemption from payment of income taxes pursuant to the provisions of Section 39 (a) (1) of the Omnibus Investments Code of 1987 for a period of four (4) years reckoned from January 2009, this Office is of the opinion as its hereby holds, that JVC is exempt from the payment of the creditable withholding tax imposed under RR 2-98, as amended, on income payments received by it during the aforementioned period with respect to its sales of lots and/or house and lots in its housing project, Bellevue, located in Upper Carmen, Cagayan de Oro City. (BIR Ruling No. DA-425-2007 dated July 27, 2007) 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 as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service