BIR Ruling [UN-165-95]

April 17, 1995 BIR RULING [UN-165-95] Ramon F. Garcia & Company Suite 410 Manila Bank Building Ayala Ave., Makati City Attention: Mr . Ramon F . Garcia Managing Partner Gentlemen : This refers to your letter dated April 8, 1995 requesting in effect for a ruling exempting your client, New Towers Corporation, from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that it suffered net operating losses in 1993 and 1994. cdt Documents submitted show that per your aforesaid clients' audited financial statements for the years ended December 31, 1993 and 1994 particularly its Statement of Income, it suffered losses in the respective amounts of P12,521,790.00 and P69,270,876.00 for the years 1993 and 1994. 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 to a payee who suffered net operating losses during the immediately preceding two (2) taxable years. Such being the case, and since your said client have incurred net operating losses during the immediately preceding two consecutive years from 1993 to 1994, this office is of the opinion as it hereby holds that your aforesaid client is exempt from the payment of the creditable expanded withholding tax prescribed under Revenue Regulations No. 12-94 on income payments to it for the year 1995. (BIR Ruling No. 126-94 dated August 15, 1994) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, the facts turned out to be different, then this ruling shall be considered null and void. Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)