BIR Ruling
BIR Ruling • Bureau of Internal Revenue (BIR) Issuances • Rulings (Unnumbered) • Nov 2, 1972
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November 2, 1972 Mr. Peter Dy 352 Concepcion Street Butuan City S i r : This refers to your letter dated April 6, 1972 requesting information whether a salesman who receives a fixed salary plus a commission from his employer, a cigarette firm, is subject to the payment of the commercial broker's percentage tax. In reply, I have the honor to inform you that the salesman referred to by you is a bona fide employee of the cigarette firm. Accordingly, he does not fall within the purview of the term "commercial broker" as defined in Section 194(t) of the Tax Code, in which case, he is not subject to the percentage tax payable by a commercial broker. The fact that the salesman receives a commission in addition to his salary does not necessarily make him a commercial broker because this is a well known practice in the business world by way of incentive for employees to efficient salesmanship. (People vs. Jose A.. Barretto, 73 Phil. 657) Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue
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