BIR Ruling [UN-254-95]

July 10, 1995 BIR RULING [UN-254-95] Canlubang Spinning Mills, Inc. Suite 1122-1123 Tytana Building Plaza Lorenzo Ruiz cor. Oriente St. Binondo, Manila Attention: Mr . Victor Ongking President Gentlemen : This refers to your letter dated May 15, 1995 requesting for exemption from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that you have incurred operational losses for the years 1993 and 1994. cdtech Documents submitted show that in your audited financial statements for the years ended December 31, 1993 and 1994 particularly your Statement of Income and Retained Earnings, it is indicated that you have incurred net operating losses in the respective amounts of P9,952,026.90 and P1,252,835.97 for the years 1993 and 1994, respectively. 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 tax payments of a payee who suffered net operating losses during the immediately preceding two (2) years. Such being the case, and since you have incurred net operating losses for two consecutive years from 1993 to 1994, this Office is of the opinion as it hereby holds that you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94 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)