BIR Ruling

July 27, 1976 Development Insurance & Surety Corporation 666 Muelle de, Binondo, Manila Attention: Mr . Protacio J . Roncesvalles Manager, Marine & Casualty Depts . Gentlemen : This refers to your letter dated June 14, 1976 requesting information as to whether the 3% contractor's tax should be based on the cost of labor or on the cost of labor plus cost of parts supplied by the contractor. In reply, I have the honor to inform you that the 3% tax prescribed by Section 191 of the Tax Code is imposed and collected on the receipts derived by the contractor for a particular job. Accordingly, the cost of labor and materials or parts supplied by the contractor in a particular job being a part of the gross receipts is taxable under the aforesaid section of the Tax Code. Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3