BIR Ruling [UN-110-95]

March 16, 1995 BIR RULING [UN-110-95] Dae Sun Electronics (Philippines), Inc. Lot 10, Block 4, Phase II Cavite Export Processing Zone Rosario, Cavite Attention: Mr . Kin No Jun Asst . Managing Director Gentlemen : This refers to your letter dated February 17, 1995, requesting for the issuance of a certificate of exemption from the creditable expanded withholding tax of 1% on income payments made to you as a local supplier of goods. aisadc Documents submitted show that you are an export enterprise registered with the EPZA with a Certificate of Registration No. 92-09 dated February 10, 1992 for the manufacture of Telephone Modular Jacks, Plugs and Cords parts mostly for use in telephones systems; that as a zone registered export enterprise, you started commercial operations on March 1, 1992 at CEPZA, Rosario, Cavite and that you are the regular supplier of Maxon Systems (Philippines), Inc. of telephone parts for its telephone systems in Rosario, Cavite, also an EPZA registered enterprise and reputedly one of the top 5,000 corporations in the Philippines. In reply please be informed that Section 4(b) (2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, provides that 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 Investments Code of 1987, as amended. As an EPZA-registered enterprise, you are enjoying exemption from payment of income taxes pursuant to the provisions of Section 39(a) (1) of the Omnibus Investments Code of 1987. Such being the case, the income payments made to you by Maxon Systems (Philippines), Inc. as its local supplier of goods shall not be subject to 1% expanded creditable withholding tax prescribed in Revenue Regulations No. 12-94. (BIR Rulings No. 50(b)/000-00/163-94 dated December 1994: UN 339-94 dated December 6, 1994) This ruling is issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, and/or any of the requirements imposed in this letter is not complied with, then this ruling shall be considered null and void. Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)