BIR Ruling

August 25, 1977 Certesa Development Corporation 795 Epifanio de los Santos Ave. P.O. Box 46 Quezon City Attention: Capt . Sergio G . Aquino PN (Ret . ) Executive Vice Pres . Gen . Manager Gentlemen : This refers to your letter dated August 3, 1977 requesting opinion as to the correct amount of gross receipts upon which the 3% contractor's tax due from you under Section 191 of the Tax Code shall be based as regards your contract with the Department of Public Highways. Under said contract, your firm will render detailed engineering design of the road component of the Package 4, Bicol Secondary and Feeder Roads Project under the Bicol River Basin Development program; and that the 3% contractor's tax is among those items included in the said agreement which is chargeable to the contracts. In reply, I have the honor to inform you that, under the foregoing facts, the 3% contractor's tax is based on the gross amount billed to the Department of Public Highways which includes the contractor's tax assumed by said contractee. Said gross amount shall then be the basis of the 3% tax to be withheld by the contractee for purposes of Republic Act No. 1051. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-2