BIR Ruling

September 9, 1969 Mr. Joaquin P. Tolentino 310 CFC Building 313 Buendia Avenue Makati, Rizal S i r : This refers to your letter dated July 16, 1969 requesting information as to the official tax status and the kind of taxes your client should pay on a business operations as follows: "My client buy time under contract from Television Stations; schedule a TV Program to be shown on that time and he pays the TV Stations base on the use of that time. His source of income will be from sponsors of the programs. The sponsors give him the spots and insertions to be shown on Television. These spots and insertions may be commercial advertisement of the products of the sponsors; or political advertisement of candidates; or industrial advertisement; or wanted ads; and the likes. The sponsors will pay my client on the number of spots or insertions shown in the program on a pre-arranged price or amount." In reply, I have the honor to inform you that under the foregoing facts, your client conducts an advertising agency and is, therefore, a business agent under Section 194(v) of the Tax Code. As such business agent, your client is subject to the annual fixed tax of P75.00 prescribed in Section 182 (A)(3)(w) of the Tax Code and to the 3% tax of his gross receipts pursuant to Section 191 of the same Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue