BIR Ruling

February 10, 1970 The Revenue District Officer Inspection District No. 49 Bureau of Internal Revenue Legaspi City S i r : In reply to your telegram dated January 20, 1970 requesting information as to whether or not professionals employed in government agencies are required to pay their professional tax or privilege tax, please be informed that professionals employed in government agencies, instrumentalities, offices and government owned or controlled corporations who use or exercise the knowledge of their profession in their employment are subject to the occupation tax imposed in Section 182(B) of the Tax Code, as amended by Republic Act No. 6110. The fact that such professionals do not engage in the private practice of their professions in view of the prohibition under the civil service law and rules does not exempt them from the payment of the tax. It must be admitted that when they are employed and in their employment they use the knowledge of their profession, they are still considered in the practice of their profession, although such practice is limited to their employment. It should be noted that the previous provision of Section 182(C) (7) of the Tax Code which exempted persons employed in any branch of the service of the Government of the Philippines whose entire professional services are devoted exclusively thereto or are applied under its direction, from the professional tax has been eliminated by Republic Act No. 6110. Such elimination is sufficiently explicit and indicative of legislative intent to reach by taxation professionals in the employ of the Government. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue