BIR Ruling No. 485-2021

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Quezon City.

Republic Act (RA) Mo. 7459; BIR RULING NO.NY - 4 8 5 - 2 0 2 1 Revenue Regulation:s (RR) No. 19-1993; BIR Ruling No. 011-2016; BIR Ruling No 190-2015 DEC 2_4_2021

San Jose, Tagaytay City 4120 Purok 163 Barnabites. nr. cor. SVCD Road RMA NUTRACEUTICALS, INC.

Attention: Mr. Rene M. Alejandring Inventor

Gentlemen:

Republic Act (RA) No. 7459, otherwise known as the "Inventors and Inve:tions Incentives Act of the Philippines." This refers to your letter dated June 08, 2021 requesting for tax exemption pursuant to

following product/s: It is represented that'Mr. Rene M. Alejandrino is the registere.l patent holder of the

Patent Number -Method and apparatus for drying food products Title March 10, 2014 Date Issued

January 20, 2015. tradename "RMA Nutraceuticals, Inc."; that the Department of Science an. Technology (DOST) that the Screening Committee of TAPI has evaluated and recommended tha. the above-mentioned patented inventions are eligible for the tax incentives pursuant to "Confirma tion Certificate" dated produced and distributed exclusively by'RMA Nutraceuticals, Inc., lder the brand n:le and inventions are new and original, and the technology is newty developed by local researchers; and that Mr. Rene M. Alejandrino is a Filipino Inventor and a bonufide member of the Filipino Inventors Society, Inc. (FISI); that the above-mentioned patented invention is being commercially -- Technology Application and Promotion Institute (TAPI) certified that the above-mentioned

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Please be informed that Section 6 of R.A. No. 7459 provi es:

license, permit fees, customs duties and charges on imports.' from the date of the first sale, subject to the rules and regulations of the Department be extended to the legal heir or assignee upon the death of the im'entor. The technologies, their manufacture or sale, shall also be exempi from payment of of Finance. Provided, that this tax exemption privilege pertaining to invention shall locally from foreign sources including inventions, any income derived from these technologies shall be exempted from all kinds of taxes during the tirst ten (10) years commercialization of technologies developed by local reseurchers or adapted "SECTION 6. Tax Exemption. -- To promote, encourage, develop and accelerate

' first ten (10) years from the date of the first sale on a commercial scale, as follows: The said exemption can be availed of by the inventor, Mr. Rene M. Alejandrino, during the

Patent Number t Method and apparatus for drying food products Title Date of First Sale January 30, 2020

from such production/distribution/marketing is subject to the payment of appropriate taxes. (BIR Ruling No. 190-2015 dated June 10, 2015) dated January 08, 2016) Hence, any income received by the company, RNA Nutraceuticals, Inc.. heir or assignee upon the death of the inventor. In other words, the t:x exemption under the entity that commercially produces and distributes the invented product. (B:R Ruling No. 01 1-2016 aforesaid Section is for the inventor, in this case, Mr. Rene M. Alejandritio, and not for any other provided that said exemption privileges pertaining to the invention shall be extended to the legal

clarifies that the only tax exemption granted by the first paragraph of Sertion 6 of RA No. 7459 merely refers to income tax. denying the appeal of an inventor relative to his tax exemption privileges granted by this Office, Case No. 03-G-422 dated February 2, 2004, affirming the finding of the Department of Finance It is important to note that the Final Resolution of the Office of' the President (OP), in OP

In effect, Mr. Rene M. Alejandrino is still subject to the following taxe::: 1. 20% final withholding taxes on interest from currency bar:k deposit and yield or Capital gains tax on sale of shares of stock prescribed undcr Section 24 (C) of the National Internal Revenue Code of 1997, as amended; any other monetary benefit from deposit substitutes and fron: trust funds and similar foreign currency deposit; arrangements and fifteen percent (15%) final withholding tax on interest from

1 Republic Act (RA) No. 10963 increased the Final withholding tax on Income from 7.5% to 15% effective ..int. ry 01. 2018

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4. Income tax on income not arising from the inventor's productive activity such as 3. Capital gains tax on sale of property prescribed under Sect ion 24 (D) of the National 6 5 Other percentage taxes under Title V of the National Internal Revenue Code of Value-Added Tax (VAT) on the gross receipts/revenues derived from the saie of liable, e.g., VAT on his purchases of raw materials, supplies and equipment/machinery, which may be shifted to him as pari of the cost of goods sold interest, royalties, prizes, winnings and dividends; the said invention products, and also VAT for which the inventor is not directly or for services rendered; and Internal Revenue Code of 1997, as amended;

1 Excise taxes directly payable in connection with the sale of invention products; and 1997, as amended;

8. Documentary stamp tax on documents, instruments and p.ipers.

of each year for the preceding calendar year an Annual Information R eturn with the Revenue District Officer having jurisdiction over his place of business. tax provided for in Section 57 (B) of the National Internal Revenue Code of 1997, as amended. as a withholding agent and as such shall withhold taxes (1) on wages/sularies of his employees; and (2) on income payments to individuals or corporations subject to the expanded withholding Finally, Mr. Rene M. Alejandrino shall prepare and file in triplici.te on or before April 15 Moreover, Mr. Rene M. Afejandrino shall register with the proper Revenue District Officer

been granted tax exemption or tax incentives and his tax liability, if any, pursuant to Section 235 of the National Internal Revenue Code of 1997, as amended. pertinent records shall be subject to periodic examination by our revenue enforcement officers for purposes of ascertaining whether he has been compiying with the conditions under which he has It is, of course, understood that Mr. Rene M. Alejandrino's books of accounts and other

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

Very truly yours. Q3

JK- Commissicier of Internal Revenue CAESAR R. DULAY 047986