BIR Ruling

January 9, 1974 Mr. Rafael Madrazo Manager, Satellite Super Club Apollo Hotel Peleza cor. Colon St. Cebu City S i r : This refers to your letter dated January 7, 1974 requesting information as to the fixed and percentage taxes payable by the Satellite Restaurant and Super Club under the following facts: "1. That the Satellite Restaurant and Super Club is operated as restaurant, supper club and bar. "2. That it is situated on top (5th Floor) of the Apollo Hotel and is owned and operated separately and distinctly from such hotel, where the passageway leads directly to the said place. "3. That being situated at the top floor of the Apollo Hotel, it caters to its hotel guests as well as to the public, solely as a restaurant and bar during the day and operates as a supper club at night starting at 7:00 P.M. up to the limits of the curfew hours, where music is provided and dancing is not prohibited. "4. That no entertainers and/or hostesses are employed by the said Super Club, where the guests are allowed to bring their own partners for entertainment." In reply, I have the honor to inform you that, under the foregoing facts, the Satellite Restaurant and Super Club, for operating a restaurant is subject to the annual fixed tax of P50.00 in accordance with Section 182(A)(1) of the Tax Code. During the day when the Satellite Restaurant and Super Club operates solely as a restaurant and bar, it is subject only to 5% tax on its gross receipts from the sale of food and 7% tax on its sales of distilled spirits, fermented liquors or wines. However, since the Satellite Restaurant and Super Club operates as a night club at night, it is subject to the 20% tax on its gross receipts which includes sales of both food and wines and liquors. (see. 191-A Tax Code.) In this connection, the receipts derived on or before 6:00 P.M. shall be considered as receipts as a restaurant and bar. Those derived after 6:00 P.M. shall be considered as its receipts as a night club. This Office is aware of the fact that night clubs may operate as restaurants, bars or cafes in the daytime when they are not in operations as such. For this purpose, therefore, the Satellite Restaurant and Super Club should keep separate sets of books and records and issue separate sales slip or invoices covering its receipts when the night club is not in operation. (Revenue Memorandum Circular No. 38-62 dated October 8, 1962). Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."