BIR Ruling [UN-033-95]

January 16, 1995 BIR RULING [UN-033-95] Joaquin Cunanan and Co. 8th Floor, BA-Lepanto Building 8747 Paseo de Roxas Makati, Metro Manila Attention: Atty . George T . Jao Lavadia Principal Gentlemen : This refers to your letter dated December 5, 1994, stating that your client, Marcopper Mining Corporation, is registered with the Board of Investments (BOI) as a new domestic producer of copper concentrates on a preferred non-pioneer status; and that the copper concentrates produced are supplied or sold by your client to Philippine Associated Smelting and Refining Corporation (PASAR),reputedly one of the top 5,000 corporations which proposes to withhold the corresponding 1% creditable withholding tax on its income payments to your client. Based on the foregoing, you now request exemption from the creditable withholding tax prescribed under Revenue Regulations No. 12-94. In reply, please be informed that under Section 4(b)(2) 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 therein prescribed shall not apply to income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of the Omnibus Investment Code of 1987, as amended. Accordingly, since Marcopper Mining Corporation is registered with the BOI Under Certificate of Registration No. DP89-627 and enjoying exemption from the payment of income taxes for a period of four (4) years from the start of its commercial operation on June 1, 1992 in accordance with the provisions of the Omnibus Investments Code of 1987, this Office is of the opinion as it hereby holds that your abovenamed client is exempt from the 1% creditable expanded withholding tax prescribed in Section 1(n) of said Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94 on income payments made by PASAR. (BIR Ruling No. UN339-94, citing BIR Ruling No. 50(b)/000-00/163-94 dated December 2, 1994) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)