BIR Ruling [UN-295-95]

August 11, 1995 BIR RULING [UN-295-95] Taxco Inns and Resorts, Inc. 35 Scout Bayoran Quezon City Attention: Mr . Manuel J . S . Pea President Gentlemen : This refers to your letter dated August 2, 1995 stating that you have incurred net operating losses for the past years as shown in your Corporate Income Tax Returns for the taxable years 1993 and 1994; and that as a result of your continued business set-back, you were forced to sell your land, building and improvements located at No. 35 Mother Ignacia St., Quezon City in favor of L & B International Tourist Hotel in the amount of Thirty Million Pesos (P30,000,000.00). In view thereof, you now in effect request for exemption from the creditable withholding tax on payments made to your corporation, including the proceeds of your sale of real property. cdtech In reply, please be informed that pursuant to Section 3(d) of Revenue Regulations No. 12-94 amending Revenue Regulations No. 6-85, otherwise known as the "Expanded Withholding Tax Regulations" stating "SEC. 3. Section 4 of Revenue Regulations No. 6-85 is hereby amended to read as follows: SEC. 4. Exemption from Withholding . The withholding of tax prescribed in these regulations shall not apply to income payments in the following cases: xxx xxx xxx (d) In the case of a payee who suffered net operating losses during the immediately preceding two (2) tax years; xxx xxx xxx this Office is of the opinion as it hereby holds that you are exempt from the creditable withholding tax on payments made to your corporation, including the proceeds of your sale of real property. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. (BIR Rulings No. 126-94 dated August 15, 1994) aisadc Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)