BIR Ruling

July 12, 1973 Filipinas Registry & Transfer, Inc. Suite 309 Martinez Bldg. Dasmarias, Manila Attention: Miss Carmelita Arcega Secretary Gentlemen : This refers to your letter dated July 10, 1973 requesting information as to whether or not you are subject to the payment of a privilege tax. cdtech It is stated in your letter that you are a merely organized corporation with the primary purpose of operating as a transfer agent and registrar of stock corporations, to facilitate the transfer and registration of stocks and other securities in the Philippines; and that your sole income will be derived from the transfer fees to be collected on each and every stock transfer transaction. In reply, I have the honor to inform you that the decision of the Court of Tax Appeals in the case entitled "Stock Transfer Service, Inc. vs. the Commissioner of Internal Revenue, CTA Case No. 2003, July 29, 1971" holding that a transfer agent is not subject to the 3% contractor's tax as an independent contractor under Section 191 of the Tax Code, has already been superceded by the amendment effected by Presidential Decree No. 69 to Section 191 of the Tax Code. Under said amendment, the term "independent contractor" is now defined in the last paragraph of Section 191 as follows: "The term independent contractors include persons (Juridical or natural) not enumerated above (but not including individuals subject to the occupation tax under Section 182(B) of this Code) whose activities consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractors or their employees." It is clear from the foregoing that as a stock transfer agent whose activity consists in the rendition of services, you are subject to the contractor's annual tax of P50.00 imposed in Section 182(A)(1) of the Tax Code and your quarterly gross receipts is subject to the 3% contractor's tax imposed in section 191 of the same Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5