BIR Ruling

1976 Percentage Tax of 6% Payable by Customs Brokers In reply to your letter dated July 29, 1976, please be informed that under Section 1 of Republic Act No. 1051, "all bureaus, offices, agencies and instrumentalities of the government, including government owned and controlled corporations, shall, before making any money payment to private individuals, corporations, partnerships and or associations, deduct and withhold any and all taxes the amount of which can be fixed, determined, computed or ascertained, due from such individuals, corporations, partnerships and/or associations on account of said money payment: . . .". The percentage tax of 6% payable by customs brokers on their gross compensation, in accordance with Section 195 of the Tax Code, is determinable at the time of payment of the compensation. Such being the case, your money payments to customs brokers which represent their gross compensation for percentage tax purposes, are subject to the withholding tax provisions of Republic Act No. 1051. cdtech