BIR Ruling

February 21, 1975 Messrs. Sindiong, Ocampo & Carcia P.O. Box 2021 M C C Makati, Rizal Attention: Mr . Maurillo L . Garcia Managing Partner Gentlemen : This refers to your letter dated February 7, 1975 requesting clarification as to whether that firm, a partnership of licensed professional engineer and architects, is subject to the contractor's fixed and percentage taxes for having rendered purely professional service for the design of buildings by preparing plans and specifications for the Panacan Rebuilt Operation Center Project of the Armed Forces of the Philippines, Camp Aguinaldo, Quezon City, but without actually undertaking their construction. In reply, I have the honor to inform you that under the foregoing facts, your firm is a partnership of individual professionals (engineers and architects) engaged in the practice of engineering and architecture. Accordingly, your firm is not considered a contractor for purposes of the contractor's fixed and percentage taxes under Section 182(A)(1) and 191 of the Tax Code, for having rendered professional services by preparing plans and specifications of the aforesaid project for the AFP, but without actually undertaking their construction. Such being the case, the professional fee that you derive from the foregoing services is not subject to the withholding tax provision of Republic Act No. 1051, as implemented by Revenue Regulations No. 21-67. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5