BIR Ruling [UN-396-95]

November 14, 1995 BIR RULING [UN-396-95] Sycip Gorres Velayo & Co. 6760 Ayala Avenue, Makati, Metro Manila Attention: Atty . J . A . Osana Tax Division Gentlemen : This refers to your letter dated March 28, 1995 requesting in behalf of your client, First Philippine International Bank, for a ruling exempting it from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 for the taxable year 1994, on the ground that it has incurred operational losses for the years 1992 and 1993. cdtech Documents submitted to this Office show that in its audited financial statements for the years ended December 31, 1992 and 1993 particularly its Statement of Income and Retained Earnings, it is indicated that First Philippine International Bank has incurred net operating losses in the respective amounts of P85,330,658.00 and P118,412,696.00. 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 payments of a payee who suffered net operating losses during the immediately preceding two (2) years. Such being the case, and since it has incurred net operating losses for two consecutive years from 1992 to 1993, First Philippine International Bank is exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94 for the year 1994. (BIR Unnumbered Ruling No. 061-95, dated February 13, 1995, citing 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. cdta Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)