BIR Ruling [UN-185-94]

June 24, 1994 BIR RULING [UN-185-94] Ma-Je-Cil International #28 Rizal Street Pozorrubio, Pangasinan Attention: Ms . Manolita Ma . P . Magno Owner/Proprietress Gentlemen : This refers to your letter dated December 10, 1993, requesting for a Certificate of Tax Exemption under the provisions of R. A. No. 6810 otherwise known as Kalakalan 20. In connection therewith, please be informed that since you have been granted a CBBE Certificate of Authority by the Municipality of Pozorrubio on September 18, 1992 on your business as manufacturer/exporter of kitchen knives, hunting knives and other cutlery items, you are exempt from all taxes and fees for which you are directly liable, including the following internal revenue taxes: 1. Excise taxes; 2. Income taxes; 3. Value-added tax (VAT) on sale of goods; 4. Tobacco Inspection fees; and 5. Other percentage taxes under Title V of the Tax Code but still liable to pay the following internal revenue taxes: 1. Capital gains taxes; 2. Value-added tax (VAT) on imported articles; 3. Income tax on income not arising from CBBE's productive activity such as interest, royalties, prizes, winnings and dividends; 4. Final tax of 20% on interest income from bank deposits and deposit substitutes; and 5. Documentary stamp tax on documents, instruments and papers. The exemption shall be for a period of five (5) years from the date of your registration on September 18, 1992. In view of your internal revenue exemptions, you are exempt from the issuance of sales invoice or receipt to your customers. If you opt to issue receipts, you are allowed to issue ordinary NON-VAT receipts duly registered with the BIR. Moreover, you shall register with the proper Revenue District Officer as a withholding agent and as such shall withhold taxes (1) on the wages of your employees; (2) income payment to individuals or corporations subject to the expanded withholding tax provided for in Section 50(b) of the Tax Code, as amended, as implemented by Revenue Regulations No. 6-85, as amended; and (3) on government money payments pursuant to RA 1051 as implemented by Revenue Regulations No. 4-88, as amended by Revenue Regulations No. 10-93. Finally, you shall prepare and file in triplicate on or before April 15, of each year for the preceding calendar year, or if you have designated a fiscal year on or before the 15th day of the fourth month following the close of such fiscal year, an Annual Information Return (BIR Form 1702A-2) with the Revenue District Officer or the Collection Officer or the duly authorized treasurer of your municipality. It is of course understood that your books of accounts and pertinent records shall be subject to periodic examination by our revenue enforcement officers for purposes of ascertaining whether you have been complying with the conditions under which you have been granted tax exemption or tax incentives and your tax liability, if any, pursuant to Section 235 of the Tax Code, as amended by PD 1959. (UN BIR Ruling dated April 23, 1991) cdtech Very truly yours, ALICIA P. CLEMENO Acting Assistant Commissioner Legal Service