BIR Ruling

September 15, 1970 Mr. Luis T. Ylanan 414-A Junquera Extension Cebu City J-317 S i r : In reply to your letter dated April 6, 1970, I have the honor to inform you that you are still liable to the annual occupation tax of P75.00 for insurance agents prescribed in Section 182(B) of the Tax Code, as amended, even if you sell insurance exclusively to members of the Knights of Columbus Fraternal Association of the Philippines of which you are also a member. Accordingly, since you have paid your occupation tax for the first semester of 1970, you should have paid the tax for the second semester which was due on or before July 20, 1970. Aside from the occupation tax, you are also subject to income tax on the commissions earned by you as insurance agent. As regards your request for information regarding exemption from the documentary and science stamp taxes, Section 236 (3) of the Tax Code, as amended, provides as follows: "Sec. 236. Documents and papers not subject to stamp tax . The following instrument, documents, and papers shall be exempt from the documentary stamp tax: "(1) . . . "(2) . . . "(3) Policies of insurance or annuities made or granted by a fraternal or beneficiary society, order, association, or cooperative company, operated on the lodge system or local cooperation plan and organized and conducted solely by the members thereof for the exclusive benefit of its members and not for profit. "(4) . . . ." Accordingly, under the foregoing provision, if your fraternal association is operated on the lodge system or local cooperative plan and organized and conducted solely by the members thereof for the exclusive benefit of its members and not for profit, the policies of insurance or annuities made or granted by said association may be exempt from the documentary stamp tax. Documents which are not subject to the documentary stamp tax are also exempt from the science stamp tax. cd Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue