BIR Ruling

May 4, 1967 Mr. Crescencio A. Toribio 356 Marcos A. Calo St. Butuan City S i r : This refers to your letter dated March 22, 1967 requesting for a ruling on the following: "A, B, and C are all licensed harbor pilots who formed ABC Company, a partnership for the purpose of practicing their profession. They agreed that the partners will contribute P12,000.00 each as capital of the partnership. They will devote their working time, experience and knowledge into a common fund of professional skill for the benefit of the partnership and in order that same may properly discharge its obligations and duties as set forth in the law, rules and regulations governing pilotage services. The net income shall be divided equally among the partners. Any and all losses shall be borne and divided among the partners in proportion to their capital contribution. cdti "Under the instant case, is ABC Company subject to the percentage tax under Section 191 of the Tax Code?" In reply, I have the honor to inform you that ABC Company, as a partnership engaged in the business of rendering pilotage services, falls squarely within the purview of independent contractor as contemplated by Section 191 of the Tax Code. As such contractor, it is subject to the annual fixed tax of P20.00 prescribed in Section 182(A)(1) and the 3% contractors tax prescribed in Section 191, both of the Tax Code. cdll Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue