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January 12, 2006DA ITAD BIR RULING NO. 003-06Arts. 5 & 7, Philippines-Japan tax treaty; BIR Ruling No. DA-ITAD-128-05; BIR Ruling No. DA-ITAD-39-03; BIR Ruling No. DA-161-05; VAT Ruling No. 004-04SGV & Co.6760 Ayala Avenue1266 Makati CityAttention: Atty. Emmanuel C. AlcantaraCo-Head, Tax ServicesGentlemen :This refers to your letters dated August 12, 2005 and January 2, 2006 on behalf of your client, Mitsui Kinzoku Engineering Kabushiki Kaisha Incorporated ("MESCO"), requesting confirmation that the income to be derived by MESCO from the two (2) contracts it entered into with the Philippine Associated Smelting and Refining Corporation ("PASAR") is not subject to Philippine income tax and consequently, to withholding tax, as well as to value-added tax (VAT). It is represented that MESCO is a nonresident foreign corporation duly organized and existing under the laws of Japan with office address at 3-2-1 Ryogoku, Sumida-ku, Tokyo Japan; that it is not registered either as a corporation or as a partnership in the Philippines per Certification of Non-Registration issued by the Securities and Exchange Commission (SEC) dated August 8, 2005; that, on...