BIR Ruling [UN-339-94]

December 6, 1994 December 5, 1994 BIR RULING [UN-339-94] Clarion Mitsuwa Philippines, Inc. Phase II, Block 7 Export Processing Zone Rosario, Cavite Attention: Ms. Luz G. Cuyco Finance/Administration Manager Gentlemen : This refers to your letter dated September 6, 1994 addressed to the Revenue District Officer of Trece Martirez, Cavite, requesting for the issuance of a certificate of exemption from the creditable withholding tax of 1% on income payments made to you as a local supplier of goods. TcCEDS Documents submitted show that you are an export enterprise registered with the Export Processing Zone Authority (EPZA) with a Certificate of Registration No. 92-040 dated July 6, 1992 for the manufacture of plastic casings and escutcheon for car radios; that as a zone registered export enterprise, you started commercial operations on April 1, 1993 at the Cavite Export Zone Processing Authority in Rosario, Cavite; and that you are the regular supplier of plastic casings and escutcheon for car radios of Clarion Manufacturing Corporation of the Philippines, also an EPZA registered enterprise and reputedly one of the top 5,000 corporations in the Philippines. In reply, please be informed that Section 4 (b) (2) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, provides that 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 Investment Code of 1987, as amended. As an EPZA-registered enterprise, you are enjoying exemption from payment of income taxes pursuant to the provisions of Section 39 (a) (1) of the Omnibus Investments Code of 1987. Such being the case, the income payments made to you by Clarion Manufacturing Corporation of the Philippines as its local supplier of goods shall not be subject to 1% expanded creditable withholding tax prescribed in Section 1 (n) of said Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94. (BIR Ruling No. 50 (b)-000-00-163-94 dated December 2, 1994). Very truly yours, (SGD.) ALICIA P. CLEMENO Assistant Commissioner Legal Service