BIR Ruling

October 27, 1966 Ferrelow (Phil.) Marketing B.B.B., Valenzuela, Bulacan Attention: Rosita Reyes M a d a m : This refers to your letter dated August 9, 1966 requesting information as to the nature and the taxes to be paid by your marketing firm, under the following facts and circumstances: cdt "As marketing firm, to deal on general appliances, the supplier requires a bond to secure the articles to be delivered to said marketing firm, which are not for sale but only for display. With the displayed articles, customers will then be solicited and if prospective buyer request delivery of the corresponding article, delivery will be made by the supplier to the marketing firm, then the latter, on commission basis and issuing its own receipt, directly delivers said article to the buyer. However, it is agreed upon that any article delivered by said supplier to the marketing firm which are not subsequently purchased and not returned within sixty (60) days from the date of said delivery said article will be considered sold by the supplier and the marketing firm has no alternative but to purchase said article, notwithstanding the absence of buyer." In reply, I have the honor to inform you that under the foregoing representation, your marketing firm is a commercial broker and, therefore, subject to the commercial broker's annual fixed tax of P150.00 prescribed by Section 182(A)(3)(s) of the Tax Code and to the broker's 6% tax imposed in Section 195 of the same Code. LLphil Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue