BIR Ruling

April 12, 1972 Calamba Investment Corporation Calamba, Laguna Gentlemen : In reply to your letter of even date, I have the honor to inform you as follows: As a licensed pawnshop, you are subject to a fixed tax of P500.00 per annum, pursuant to Republic Act No. 6110, which took effect on September 1, 1969. In other words, beginning the second semester of 1969 you became subject to the fixed tax of P500.00 for engaging in the business of a pawnshop. You are also considered engaged in business as a lending investor during that period when you were extending real estate loans and as such should have paid an annual fixed tax of either P75.00, P150.00 or P300.00, depending on the class or category of Calamba as a municipality (see Section 182(A)(3)(u) of the Tax Code). When you stopped real estate loans in 1966, your liability to the lending investor's fixed tax ceased from that year. The mere act of collecting unpaid loans from that time and onward will no longer render you liable for said tax. In this connection, you are advised that in determining the category of the business of a taxpayer, this Office looks into his actual operations and does depend merely on the trade name adopted by him. Thus, even if your trade name appears to be that of an investment or finance company, if, as represented, you are merely operating a pawnshop, you shall not be liable for taxes due from an investment or finance company. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue