BIR Ruling

November 14, 1966 First Assistance Credit & Trading Services Suite 500, FCI Bldg., Dasmarias Manila Attention: Mr . Ernesto Panganiban Manager Gentlemen : This refers to your letter dated May 27, 1966 requesting information as to what internal revenue taxes your proposed partnership shall be subject. prcd In reply thereto, you are informed as follows: The aims of your proposed partnership are to engage in the business of credit reporting, collection, market research and other allied services for a stipulated fee. These aims appear to be a service solicitation for a compensation which could be considered as sale of services or labor that falls within the meaning of other independent contractors under Section 191 of the Tax Code. As such, it is subject to an annual fixed tax of P20.00 and to the 3% contractors tax on its gross monthly receipts in accordance with Sections 182(A)(1) and 191 of the Tax Code. For engaging in the business of advertising, your partnership is constituted a business agent under Section 194(v) of the Tax Code, hence, subject to the annual fixed tax of P75.00 pursuant to Section 182(A)(3)(w) and to 3% tax prescribed in Section 191, both of the same Code. Your partnership is required to keep and use a simplified set of bookkeeping records wherein all the transactions shall be recorded if its gross quarterly earnings or receipts do not exceed P5,000.00, otherwise, it must use and keep a journal and ledger or their equivalents. (Section 3, Revenue Regulations No. V-1, as amended) Before using any of these books of accounts, you must present them for approval and registration with the Regional Director or the Chief Revenue Officer, as the case may be, in accordance with Section 19 of Revenue Regulations No. V-1. cdtech If the partnership shall be general and duly registered, it shall not be subject to income tax; if not registered or if limited, it shall be subject to income tax as a corporation. If the partnership shall be a registered general partnership, the partners shall be liable to income tax in their individual capacity and the shares in the profits to which each partner is entitled shall be returned by them for taxation regardless of whether or not distributed. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue