BIR Ruling

July 11, 1972 Hon. Pablo A. Malasarte House of Representatives Manila S i r : This refers to your letter dated July 10, 1972 requesting a ruling based on the following facts: "'A' is a manufacturing company whose products are sold throughout the country by their 'wholesale peddlers'. These wholesale peddlers are under Surety Bonds. They do not receive salaries but only 'allowances' for meals, gasoline, oil and salaries of the drivers and helpers of the panel they are using in their trade. The panel is owned by the company. "These wholesale peddlers in getting goods from company 'A' do not pay the corresponding amount appearing in the sales invoices. Payments for whatever quantity of stocks they sold are liquidated after their sales in their respective areas. Goods unsold by them are returned to the company. "All wholesale peddlers of company 'A' cannot sell their goods beyond the price fixed by the company. Of the aforementioned circumstances, are wholesale peddlers of flour, textiles, cigarettes and other articles can be classified as commercial brokers." In reply, I have the honor to inform you that under the foregoing circumstances, the so-called wholesale peddlers of Company "A" as hereinabove represented are commercial brokers within the purview of Section 194(t) of the Tax Code, as amended. Such being the case, they are subject to the P300.00 annual fixed tax imposed in Section 182(A)(3)(bb) and to the 6% tax on their gross compensation pursuant to Section 195, respectively, of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue