BIR Ruling
BIR Ruling • Bureau of Internal Revenue (BIR) Issuances • Rulings (Unnumbered) • Aug 13, 1970
Full text
August 13, 1970 Mr. Eduardo Hagamann 27 Tabayoc, Quezon City S i r : This refers to your letter dated June 19, 1970 requesting information as to whether the 10% service charge collected by hotels and restaurants is subject to the payment of the percentage tax under Section 191-A of the Tax Code, as amended by Republic Act 6110. In reply, I have the honor to inform you that the 10% service charge does not form part of the hotel or restaurant keeper's taxable receipts if said 10% service charge is actually distributed to the employees. However, if a part of the services charge is retained by the hotel or restaurant keeper, that part retained shall form part of the keeper's taxable gross receipts (B.I.R. Ruling No. 65-006, April 7, 1965). Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue
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