BIR Ruling [UN-275-95]

July 26, 1995 BIR RULING [UN-275-95] Philstar Marketing and Development Inc. 2nd Floor, HGL Building 554 EDSA, Caloocan City Attention: Ms . Ma . Lourdes R . Orfiano Accountant Gentlemen : This refers to your letter dated January 31, 1995, requesting this Office to certify that you are not subject to the creditable withholding tax on the sale of your industrial lots during the four years that you were enjoying your income tax holiday effective April 28, 1991. cd It is represented that you were registered with the Board of Investments on December 17, 1990 as a new developer of industrial estate in Malolos, Bulacan, with a total land area of fifty one (51) hectares; that as a BOI-registrant, you were granted income tax holiday for four years from the start of your commercial operation or actual start of selling of your developed lots whichever event comes first but in no case earlier than the date of registration of the project; that you have commenced your commercial operation on the same date that you have started selling your industrial lots; and that as a consequence of such sale, the Revenue District Officer of Valenzuela, Bulacan, has required the presentation of a certificate of exemption from the creditable expanded withholding tax as prescribed under Revenue Regulations No. 12-94 dated June 27, 1994 which amended Revenue Regulations Nos. 6-85 and 1-90 as amplified by Revenue Memorandum Circular No. 7-90 dated January 16, 1990. In reply, please be informed that while Revenue Memorandum Circular No. 7-90 dated January 16, 1990, amplifying Revenue Regulations No. 1-90 provides that "sales, exchanges or transfer of real properties (whether classified as ordinary or capital asset) by corporations, consummated on or after January 1, 1990 are subject to the creditable withholding tax"; the same does not apply to you during the period that you were enjoying the income tax holiday as a BOI-registered preferred non-pioneer industrial estate developer. Accordingly, this Office hereby certifies that you need not pay the creditable withholding tax on the sale of your industrial estate during the four years that you were enjoying an income tax holiday, effective April 28, 1991. (Refer to BIR Ruling No. 206-91 dated October 4, 1991) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)