BIR Ruling

September 28, 1970 Barcelon, Roxas & Company Management Partnership Room 405, Araza Building Cor. Makati Avenue & Paseo de Roxas Makati, Rizal Attention: Mr . Joseph T . Pietrus Partner Gentlemen : Reference is made to your letter dated April 21, 1970 requesting information on the following: "We are a duly registered management consultancy general partnership organized for the purpose of establishing a lawful and formal medium through which general or specific management services and/or specific technical, consultancy or advisory services, including research and/or computer facilities may be offered to any and all kinds of enterprises, projects or programs. For these services we render to our clients, we derive income on a contractual and/or retainer basis. Fiscal year of the partnership is from February 1 to January 31 of the succeeding year." Now you want to know; 1. The business tax you are subject to; 2. When to file your income tax return; 3. The report to be submitted to the BIR and when will it be submitted; 4. The requirements for certification by a CPA on your financial statements, and others. In reply, I have the honor to inform you that under the foregoing facts, your partnership is an independent contractor subject to the annual fixed tax of P50.00 and to the 3% tax on its gross receipts pursuant to Sections 182(A)(1) and 191(18), respectively, of the Tax Code, as amended. As a duly registered partnership, you are not subject to the corporate income tax. However, you are required to file with this Office a return of your income on BIR Form No. 17.04 for the purpose of furnishing information as to the share in the gains or profits which each partner shall include in his individual return. Said return should be filed on or before the 15th day of the fourth month following the close of your fiscal year. (Sec. 22, Income Tax Regulations). With regard to the requirements for certification of a CPA on your financial statements and others please be informed that under the last proviso of Section 334(A) of the Tax Code, as amended by Republic Act No. 6110, corporations, companies, partnerships, or persons whose gross quarterly sales, earnings, receipts or output exceed twenty-five thousand pesos, shall have their books of accounts audited and examined yearly by independent Certified Public Accountants and their income tax returns accompanied with certified balance sheets, profit and loss statements, schedules listing income producing properties and the corresponding incomes therefrom and other relevant statements. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue