BIR Ruling

October 15, 1971 Mr. Joaquin P. Tolentino Certified Public Accountant MBC Bldg., 313 Buendia Ave. Makati, Rizal S i r : This refers to your letter dated October 5, 1971 requesting information as to whether or not receipts derived by your client, a Filipino contractor from his contract with the U.S. Naval Base in Subic is exempt from the 3% contractor's tax. In reply, I have the honor to inform you that receipts derived by a Filipino contractor from his contracts with the U.S. Military Bases (naval or air bases) on construction works for the operation, maintenance and defense of the bases is exempt from the 3% contractor's tax pursuant to the U.S.P.I. Military Bases Agreement. Accordingly, if the construction undertaken by your client for the U.S. Naval Base in Subic is for the operation, maintenance and defense of said base, then his receipts derived therefrom is exempt from the 3% contractor's tax. cdi Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue