BIR Ruling No. 261-2018

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

RA 7916; RR No. 2-98 BIR Ruling No. 291-12

#261-2018 2-22-2018

CPIP Admin Bldg., Brgy. Batino/Prinza Starworld Corporation Calamba, Laguna

Attention: Leonila P. Andal Accounting and Administration Manager

Gentlemen:

known as the "Special Economic Zone Act of 1995. Corporation, for exemption from creditable withholding tax on account of Starworld Corporation's registration with PEZA under Republic Act (RA) No. 7916, otherwise This refers to your letter dated July 22, 2016 requesting, on behalf of Starworld

construct, administer, manage and operate the Calamba Premiere International Park- Exchange Commission (SEC) with Company Registration No. Starworld Corporation is a PEZA-registered Developer/Operator of Calamba Premiere International Park- Special Economic Zone (SEZ), Calamba City, Laguna under PEZA Certification dated January 8, 2016, it is provided that Starworld Corporation's registration as an Ecozone Developer/Operator shall entitle it to establish, develop, SEZ covering : (1) Registration Certificate No. It is represented that Starworld Corporation, with Tax Identification Number , is a domestic company duly registered with the Securities and hectare area, and (2) dated July 1, 1998; that based on PEZA hectare area proclaimed as that

income/operations from/for services to PEZA-registered enterprises in lieu of national and local taxes. 13, 1998 and November 19, 2008, respectively; and that based on the same special economic zone under Presidential Proclamation No. 1135 and 1669 dated April Certification, Starworld Corporation shall be entitled to the Special Tax on

paying all local and national taxes and, in lieu thereof, are only subject to the 5% special tax on gross income, to be distributed in accordance with Section 24 of RA No. 7916. In reply, please be informed that PEZA-registered enterprises are exempt from

to wit:

Except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business SEC.24. Exemption from National and Local Taxes

Starwould Corporation P'age 2 of 3 #261-2018 2-22-2018

five percent (5%) of the gross income earned by all business enterprises within the ECOZONE shall be paid and remitted as follows: establishments operating within the ECOZONE. In lieu thereof.

(b) Two percent (2%) which shall be directly remitted by the (a) Three percent (3%) to the National Government: municipality or city where the enterprise is located. business establishments to the treasurer's office of the

XXXXXXXXX

(RR) No. 2-98, as amended, provides: Relative to the above-provision, Section 2.57.5(B)(2) of Revenue Regulations

withholding of creditable withholding tax prescribed in these Regulations shall not apply to income payments made to the "SECTION 2.57.5. Exemption from Withholding. - The following:

XXX XXX XXX

(B) Persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special, such as but not limited to the following:

XXX XXX XXX

Investments, Philippine Export Processing Zones and (2) Corporations registered with the Board of

Code of 1987 and RA 7227, as amended, respectively; Subic Bay Metropolitan Authority enjoying exemption from the income tax pursuant to EO 226, as amended, Republic Act No. 7916 and the Omnibus Investments (Underscoring supplied)

tax pursuant to RA No. 7916, its revenues derived directly in connection with its apply to income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special. Accordingly, since registered activity as Ecozone Developer/Operator of Calamba Premiere International Park- SEZ, Calamba City, Laguna, shall not be subject to the creditable withholding tax prescribed under RR No. 2-98, as amended. It must be emphasized, however, that with regard to Starworld Corporation's sale, transfer, assignment, or lease of lots within the Ecozone, the same shall be made only in favor of PEZA-registered entities. (BIR StarworldCorporation is an enterprise enjoying exemption from the payment of income Based on the foregoing, it is clear that the creditable withholding tax does not

Ruling No. 291-2012 dated April 25, 2012)

Starworld Corporation Page 3 of 3 #261-2018 222-2018

withholding agent for the government if it acts as employer and any of its employees received.compensation income subject to compensation withholding tax, or if it makes payments to individuals or corporations subject to the withholding taxes at source as required under Chapter XIII and Section 57 of the Tax Code of 1997, as amended and implemented by RR No. 2-98, as amended. It should be understood that Starworld Corporation shall be constituted as a

is required to file its tax returns and pay its tax liabilities, on or before the deadline as provided under the 1997 Tax Code, as amended, using the electronic system for filing annual tax incentives report of its income-based tax incentives, VAT and duty exemptions, deductions, credits or exclusions from the tax base, as may be provided and payment of taxes of the BIR. Furthermore, it shall file with PEZA a complete under RA No. 7916, within thirty (30) days from the deadline for filing of tax returns and payment of taxes. Pursuant to Section 4 of Republic Act (RA) No. 107081, Starworld Corporation

However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void This ruling is being issued on the basis of the foregoing facts as represented.

Very truly yours.

1eucuy CAESAR R.DULAY Commissioner of Internal Revenue :013392

K-1

: An Act Enhancing Transparency in the Management and Accounting of Tax Incentives Administered by Investment Promotion Agencies.