BIR Ruling

January 30, 1969 Mr. Urbano Garcia 6 Scout Fuentebella Quezon City S i r : This refers to your letter dated January 10, 1969 requesting information as to whether or not you are right in paying the P150.00 real estate dealer's fixed tax for 1968 on January 8, 1969 for the rental of P7,260.00 actually received by you for the previous year, 1968. cdt It was verbally represented that your apartment was offered for lease beginning the second semester of 1964 deriving therefrom a rental income of P3,000 more or less for the said semester; that for the years 1965, 1966 and 1967 you derived an annual; rental income of P7,260.00 and paid the corresponding yearly real estate dealer's fixed tax of P150.00. However, in 1968 you did not pay the real estate dealers fixed tax on the belief that since the rental income for said year has not been actually received by you, the determination of the real estate dealer's fixed tax cannot yet be ascertained. So, since your actual rental income in 1968 is P7,260.00 you paid the fixed tax for said year on January 8, 1969. In reply, I have the honor to inform your that real estate dealer's fixed tax imposed in Section 182(A) (3) (s) of the Tax Code is payable annually on or before the 20th of January, the rate of which shall depend upon the total amount of rentals derived during the preceding calendar year. Inasmuch as your annual rental income for 1965, 1966 and 1967 has consistently been more than P4,000 but not more than P10,000, you should have paid your annual real estate dealer's fixed tax for 1968 on or before January 20, 1968 without incurring the penalties attendant to non-payment. In view thereof, you are subject to the penal provision of Section 208 of the Tax Code which imposes on any person carrying on a business without payment of the fixed privilege tax required by law of such business, in addition to being liable to the payment of such tax, a fine of not exceeding P1,000.00 or by imprisonment for a term not exceeding six months, or both. However, in compromise of such penal liability it is suggested that you pay a compromise penalty in an amount equivalent to P10.00 for every capital investment of P2,500.00 or fractional part thereof for non-payment of the said fixed tax for 1968 as a real estate dealer, pursuant to General Circular No. V-240, dated March 15, 1967. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue