BIR Ruling [UN-214-95]

June 15, 1995 BIR RULING [UN-214-95] Euro-Med Laboratories, Phils., Inc. Rm. 303 PPL Building 1000 United Nations Avenue, Manila Attention: Ms . Georgiana S . Evidente Senior Vice-President Gentlemen : This refers to your letters dated July 20 and August 16, 1994 stating that Euro-Med Laboratories, Phils., Inc. is registered with the Board of Investments (BOI) as a producer of intravenous fluids in plastic bottles which sells the same to private and government hospitals and drugstores; that these buyers withhold the corresponding 1% creditable withholding tax on its income payments to you. Based on the foregoing, you now request exemption from the creditable expanded 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 Investments Code of 1987, as amended. Accordingly, since Euro-Med Laboratories Phils., Inc. is registered with the BOI under Certificate of Registration No. EP-88-354, dated May 13, 1988 and enjoying income tax holiday for a period of six (6) years from commercial operation which is August 1989 as proposed in the project feasibility study, or actual start of commercial operation whichever comes first provided that in no case shall this be before date of BOI registration in accordance with the provisions of the Omnibus Investments Code of 1987, this Office is of the opinion as it hereby holds that Euro-Med Laboratory Phils. Inc. is exempt from the 1% creditable expanded withholding tax prescribed in Section 1(o) of said Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, on income payments made by private and government hospitals and drugstores. (BIR Ruling No. UN-339-94 citing BIR Ruling No. 50(b)/000-00/163-94 dated December 2, 1994) cd Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)