BIR Ruling [UN-027-95]

January 13, 1995 BIR RULING [UN-027-95] Promo Innovation, Inc. Bankers Centre, 6th Floor 6764 Ayala Avenue 1226 Makati, Metro Manila Attention: Mr . Joseph C . Leighton, Jr . President Gentlemen : This refers to your letter dated November 4, 1994 requesting for a ruling exempting you from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that you have incurred operational losses for the years 1992 and 1993. Documents submitted show that in your audited financial statements for the years ended December 31, 1992 and 1993 particularly your Statement of Income it is indicated that you have incurred net operating losses in the respective amounts of P869,363.08 and P793,138.57 for the years 1992 and 1993. In reply, please be informed that under Section 4(d) 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 these regulations shall not apply to income payments of a payee who suffered net operating losses during the immediately preceding two (2) years. Such being the case, and since you have incurred net operating losses for two consecutive years from 1992 to 1993, 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. 12-94 for the year 1994. (BIR Ruling No. 126-94 dated August 15, 1994) This ruling is being issued on the basis of the foregoing facts as presented. However, if upon investigation the facts turned out to be different, then this ruling shall be considered null and void. aisadc Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)