BIR Ruling

March 4, 1976 3% Contractor's Tax In reply to your letter dated January 28, 1976, I have the honor to inform you that persons under contract for embroidery and apparel for export, as well as their agents and contractors are exempt from the payment of the 3% contractor's tax pursuant to Section 191(16) of the Tax Code. Such being the case, for contemplating to engage in business as embroidery contractor of products for export with the Gelmart Industries Phil., Inc., you are exempt from the 3% contractor's tax on your receipts exclusively derived therefrom. Moreover, as an embroidery contractor, you are not liable to the payment of the graduated fixed annual tax imposed under Section 182 A(2) of the Tax Code on your gross receipts derived therefrom. However, you are subject to income tax. cdtech