BIR Ruling

July 22, 1968 Mr. Antonio S. Tiongson, Jr. Chairman of the Board Computer Associates, Inc. L.P.L. Building 215 Buendia Ave. Makati, Rizal S i r : This refers to your letter dated July 15, 1968 requesting information as to the internal revenue taxes that the Computer Associates, Inc. is liable to for engaging in the business of training people for data processing and providing data processing services. It is represented that the main purpose of the business is to train people for data processing; that the training consists of subjects in various aspects of data processing, such as key punching, computer programming, computer operations, etc., and to augment your income from the school, you plan to provide data processing service to clients for a fee. In reply, I have the honor to inform you as follows: For engaging in the business of training people for data processing as hereinabove represented, your firm is not subject to any internal revenue tax on business if it is duly authorized by the Bureau of Vocational Schools, Department of Education. If it is not authorized by the said office, then it will be considered as an independent contractor, liable to the 3% tax imposed in Section 191 of the Tax Code. For engaging in the business of providing data processing service to clients for a fee, your firm is constituted an independent contractor, hence, subject to the P20.00 annual fixed tax and to the 3% tax prescribed in Sections 182(A)(1) and 191 of the Tax Code, respectively. The receipt derived by your firm in the operation of the abovestated businesses is subject to the income and additional residence taxes. iatdc Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue