BIR Ruling

November 3, 1972 Del Rosario & Co. Certified Public Accountants 666 T.M. Kalaw Street Ermita, Manila Gentlemen : This refers to your letter dated October 31, 1972 requesting information as to whether or not your client, Philex Mining Corporation is subject to the 3% contractor's tax under the following facts. It is represented that your aforesaid client leased a parcel of mineral land which they are developing on a royalty basis; that under the lease agreement, the owner of the land has no participation whatsoever in the exploration and mining operations, neither in any aspect of the management of the property, except to receive the corresponding royalty. In reply, I have the honor to inform you that based on the foregoing facts, your client is not a contractor. Such being the case, it is not subject to the contractor's fixed and percentage taxes prescribed in Sections 182(A)(1) and 191 of the Tax Code. cdta Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue