BIR Ruling [UN-112-95]

March 20, 1995 BIR RULING [UN-112-95] Dae Ryung Ind., Inc. Philippines Lot 1-10, Block 20, Phase IV Cavite Export Processing Zone Rosario, Cavite Attention: Mr . Eui Gyoon Han President Gentlemen : This refers to your letter dated February 16, 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. cd Documents submitted show that you are an export enterprise registered with the EPZA with a Certificate of Registration No. 91-036 dated November 11, 1991 for the manufacture of printed circuit boards, mostly for use in electronics systems; that as a zone registered export enterprise, you started commercial operations on September 8, 1992 at CEPZA, Rosario, Cavite; and that you are the regular supplier of Maxon Systems (Philippines), Inc. of printed circuit boards 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 2, 1994; UN 339-94 dated December 6, 1994; UN 071-95 dated February 20, 1995) 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)