BIR Ruling

February 21, 1968 Mr. Jesus Moran Sison President Dome Agricultural & Management Corp. 3rd Floor, Building CMS, Pasong Tamo Extension, Makati, Rizal S i r : This refers to your letter dated February 7, 1968 stating the following: "1. We are an agricultural corporation engaged in the development of farms and farm products. Our work consists mainly in the assigning of farm technicians and consultants to the farm of our clients to help them improve their yield. For our services, they give us a certain percentage of their harvest. "2. We are also rendering management service to our clients. We make project studies and feasibility studies. From this, we derive income for the professional services rendered by us." cdta You now request information as to whether or not the above-mentioned services rendered by your corporation to its clients fall under the category of the term "independent contractor" as provided under Section 191 of the Tax Code. In reply, I have the honor to inform you that the services rendered by your corporation falls squarely within the purview of the term "independent contractor" as contemplated by Republic Act No. 1612, amending Section 191 of the Tax Code. It has been the position of this Office that a corporation engaged in the business as contractor, regardless as to whether or not the performance of which calls for the exercise or use of the mental or physical or manual faculties of its employee or employees falls under the category of "other independent contractors", under Section 191 of the Tax Code. In view thereof, the Dome Agricultural and Management Corporation, as a contractor, is subject to the annual fixed tax of P20.00 prescribed in Section 182(A)(1) and to the 3% contractors tax prescribed in Section 191 both of the Tax Code. It is, likewise, subject to the income and additional residence taxes. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue