The Department of Finance thru its officers entered into a contract with foreign investors granting them exemption from all forms of taxes to encourage investments in the Philippines. Many people will have opportunities in different industries and the government will earn higher revenues for the support of its people. Is the contract valid or void? Why or why not?

ABC Advertising Company is a non-resident corporation duly organized and existing under the laws of Singapore. It is not doing business and has no office in the Philippines. DEF Corporation, a domestic corporation, retained the services of ABC to do all the advertising of its product abroad. For said services, ABCs fees are paid through outward remittances. Are the fees received by ABC subject to any withholding tax?

A, a resident citizen of the Philippines, established a restaurant with a starting capital of Php 5,000,000. Below are the capital distribution of Mr. A:

• Land amounting to Php 2,500,000
• Cash amounting to Php 1,000,000
• Furniture and fixtures amounting to Php 400,000
• Building costing Php 1,100,000

Can Mr. A be exempt from paying income taxes provided that he is qualified to register as BMBE? Why or why not?