BIR Ruling

December 5, 1966 Mr. Nicolas E. Fabella Sta. Catalina, Negros Oriental S i r : This refers to your letters dated June 9, 1966 and August 19, 1996 which have been referred to us by the Office of the Solicitor General requesting clarification on the following: LibLex "1. The Beneficial Life Insurance Co., Inc., in its letter to me dated June 1, 1966 contends that it has gathered from informal inquiry that the exceptions provided under Section 182-C(1) of the National Internal Revenue Code do not apply to Insurance Agents. Since insurance agents and subagents are included under Sub-section B (1) of the same Section 182 of the Internal Revenue Code could it be possible that the contention of the said Beneficial Life Insurance Co., Inc. and/or its informant can be justified? Will the provision of the law mentioned really will not apply particularly to insurance agents? "2. In the event that legal opinion will come out in favor of the exemptions to the occupation involved, can the collecting officer or personnel of the government be liable for the offense of illegal collections of occupation tax? "Also, I respectfully ask for information if a forest concessionaire who is not operating sawmill but sells locally and export logs can be considered Log Dealer." In reply, I have the honor to inform you as follows: Exemptions provided for under Section 182(C)(1) of the Tax Code do not apply to insurance agents and subagents because said exemptions refer only to persons subject to the sales tax, such as manufacturers, producers and importers. Exemption from the occupation tax is provided by Section 182(C)(1) of the same Code. As, insurance agents and subagents are not covered by exemption, they are necessarily subject to the tax regardless of the amount of their monthly earnings. Authorized tax collectors are not civilly or criminally liable for erroneously collecting taxes. Taxes erroneously collected are however, refundable. The first concessionaire who sells logs locally or abroad is not considered a "log dealer". When the law speaks of a dealer, it means one whose business is to buy and sell merchandise, goods and chattels, as a merchant and the term is synonymous with trader. He is not one who buys to keep or one who manufactures for the purpose of selling, but one who buys and sells again. He stands immediately between the producer or manufacturer and the consumer and depends for his profit, not upon the labor he bestows upon his commodities but upon the skill and foresight with which he watches the market. (BIR Ruling No. 198, series of 1959). Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue