BIR Ruling

November 21, 1967 The Acting Regional Director Revenue Region No. 16 Butuan City S i r : This refers to your letter dated October 7, 1967 stating the following: "This has reference to the issue as to whether or not the SOUTHERN PRODUCTS IMPORT & EXPORT CORPORATION, Daet, Camarines Norte, with an agency at Surigao, Surigao del Norte, is liable for an additional fixed annual tax liability at the latter place in spite of having paid the amount of P500.00 at the former. Self-explanatory copies of letters relevant to this case are enclosed herein, for your perusal. LLpr "Records of this case disclose the following: "1. That the Southern Products Import & Export Corporation is a dealer-exporter of copra; "2. That the agency at Surigao, Surigao del Norte is engaged in the purchase and loading of copra on foreign vessels; and "3. That the same agency has been paying the initial or minimum graduated fixed tax of P10.00 (C-13) yearly since 1963. "As the attached enclosures will further disclose, notwithstanding the explanation made by this Office that the tax on business is payable for every separate and distinct establishment or place subject to tax is conducted; and that a corporation with a main store and agencies like the Southern Products Import & Export Corporation is subject to as many privilege taxes as there are main and branch stores, Mr. William B. Mulligan, the corporation's CPA, still insists that, inasmuch as: a) The agency at Surigao is just a buying office for the corporation; cdta b) All that the agency bought were periodically shipped in the name of the corporation and not of the agency; c) The agency has no capital of its own and the sales of copra were made by its main office at Daet, Camarines Norte; and d) The said agency do not figure in sales of copra it bought in Surigao as shown by the fact that it does not even have sales invoices. the payment by the corporation at its main office at Daet, Camarines Norte of the amount of P500.00 as its fixed annual graduated tax liability, likewise sufficed for its agency at Surigao, Surigao de Norte." In reply, you are informed that based on the aforequoted facts the agency of the Southern Products Import & Export Corporation located at Surigao del Norte, is not subject to the payment of the privilege tax. This is for the reason that the mere act of buying does not constitute the doing of business. However, the buying agency is required to keep records of its transactions particularly its purchases. Very truly yours, (SGD.) AMBROSIO M. LINA Acting Commissioner of Internal Revenue