BIR Ruling No. 541-2017

RYPUBIT.OF HHE PHH PPAIS

DIAFIMENT O FINANGH BUREAU OF INTERNAL RFVENUF

Quezon City

RA 7227: RR No. 2-98 BIR Ruling No. 291-12

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Brand-Rex Compound Lot I 1/12 Argonaut Highway Boton Area, Subic Bay Freeport Zone SUBIC NEXUS TECHNOLOGIES, INC.

Attention: Maria Teresa Teologo-Matammu Comptroller

Gentlemen:

as, the "Bases Conversion and Development Act of 1992. Nexus Technologies, Inc. ("Subic Nexus") for a Certificate of Exemption from the payment of creditable withholding tax prescribed under Revenue Regulations No. 2- 98, as amended. on account of your registration with the Subic Bay Metropolitan Authority (SBMA) in accordance with Republic Act (RA) No. 7227, otherwise known This refers to your letter dated November 28. 2014 requesting on behalf of Subic

Commission (SEC) with Company Registration No. registered with SBMA as a Subic Bay Freeport Enterprise with the following purposes: Systems integrator, reseller of IT products and services to Subic Bay Freeport Zone enterprises and those located in nearby economic zones at Area 11-A. 11B & 2. Lot Registration and Tax Exemption No. 11/12, Argonaut Highway, Boton Area. Subic Bay Freeport Zone. per Certificate of It is represented that Subic Nexus, with Tax Identification Number is a domestic company duly registered with the Securities and Exchange valid until October 12, 2017. and that it is also

tax on gross income, to be distributed in accordance with RA No. 7227, to wit: paying all local and national taxes and. in lieu thereof. are only subject to the 5% special In reply: please be informed that SBMA-registered enterprises are exempt from

"SECTION 12. Subic Special Economic Zone. ---xxx

following policies: The abovementioned zonc shall be subject to the

XXX XXXXXX

regulations to the contrary notwithstanding, no taxes, locai (c) The provisions of existing laws, rules anc

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Subic Nexus Technologies. Inc Page 2 of 3 C

and national, shall be imposed within the Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the gross income earned by all business and enterprises within the Subic Special Economic Zone shall be remitted to the National Government. one percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population area, and other factors.

XXX XXX XXX

(RR) No. 2-98. as amended by RR No. 14-02. provides: Relative to the above-provision, Section 2.57.5(B)(2) of Revenue Regulations

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

XXX XXX xXX

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

XXX xXX XXX

(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 E0 226, as amended. Republic Act No. 7916 and the Omnibus Investments Investments, Philippine Export Processing Zones and

xxx xxx xxx." (Underscoring supplied)

Based on the foregoing. Section 2.57.5.(B)(2) of RR No. 2-98, as amended, is

of any law, general or special. Accordingly. since Subic Nexus is a SBMA-registered persons enjoying exemption from payment of income taxes pursuant to the provisions enterprise, income payments made to it, with respect to its registered activity: Systems creditable withholding tax prescribed in RR No. 2-98. as amended. (B/R Ruling No. 25- explicit that the expanded withholding tax does not apply to income payments to and those located in nearby economic zones at_Area 11-A. 11B & 2. Lot 11/12. Argonaut Highway, Boton Area..Subic Bay Freeport Zone, shall not be subject to 2% integrator.reseller of IT products and services to Subic Bay Freeport Zone enterprises 2012 dated April 25,2012)

Subic Nexus Technologies. Inc. Page 3 of 3 1:541-2017 11-21-2017

withholding agent for the government if it acts as employcr 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 tax 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 must be emphasized. however, that Subic Nexus shall be constituted as a

to file its tax returns and pay its tax liabilities. on or before the deadline as provided payment of taxes of the BIR. Furthermore, it shall file with SBMA a complete annual under the 1997 Tax Code. as amended. using the electronic system for filing and 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 under RA No. 7227, 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. 10708', Subic Nexus is required

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.

Comisione of nema fy"*8 CAESAR R. DULAY

K-1

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