BIR Ruling

October 23, 1972 Professor Redentor Romero Conductor and Music Director National Philharmonic Society of the Phil. Suite B. 2nd Floor (East Wing) Metropolitan Theater Building Plaza Lawton, Manila S i r : This refers to your letter dated September 14, 1972 requesting the exemption from tax of compensation paid to foreign artists contracted by the National Philharmonic Society of the Philippines to perform in this country. acd You represented that the payment of income tax due on the income received by foreign performers in the Philippines will be shouldered by the Society; that inasmuch as the Society enjoys tax exemption under Republic Act No. 722, such artists' fees should be exempt from income tax. In reply, I have the honor to inform you that fees received by foreign artists from their performances in the Philippines constitute income of said foreign artists, returnable for income tax purposes, unless exempt from tax by law. Inasmuch as there is no law or statute exempting these fees of foreign artists, the same are subject to income tax. It may be stated in this connection that exemption from tax is a personal privilege which may be enjoyed solely by the grantees. The benefit of exemption may not be extended to persons not entitled thereto. By allowing the Society to claim tax exemption on the fees of these foreign artists would be tantamount to extending the benefit of the law to persons not entitled thereto, since the payment of income tax on salaries or compensation is an obligation of the recipient-employees and not of the employer. Accordingly, the foreign performers or artists, being non-resident aliens engaged in trade or business in the Philippines are subject to the payment of their respective income taxes at the rates prescribed in Section 21 of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue