BIR Ruling

December 6, 1974 The General Manager Travelplan, Inc. P. O. Box 4419 Manila S i r : This refers to your letter dated December 3, 1974 stating that you are organized as a wholesale tour operator that derives income from hotels, tourist bus operators and restaurants; that you deal with other travel agents in other countries and they remit to you the full amount due to hotels, tourist bus operators and restaurants paid by their customers (tourists); and that their remittance and your income is illustrated as follows: cdt Hotel charges payable P100.00 Tourist bus operator charges payable 50.00 Restaurant charges payable 50.00 Total amount to you by travel agents abroad P200.00 Less: Income for your services (commission) 20.00 Total due hotels, tourist bus operators, Rest P180.00 Under the foregoing circumstances, you would like to know the basis of the 6% broker's tax payable by your firm. In reply, I have the honor to inform you that under the foregoing facts, your firm is a commercial broker within the purview of Section 194(t) of the Tax Code and, therefore, subject to the P300.00 annual fixed tax prescribed in Section 182(A)(3)(bb) of the Tax Code and to the 6% broker's tax on its gross compensation pursuant to Section 195 of the same Code. Under the foregoing computation, the gross compensation of that firm for purposes of the 6% tax is P20.00, its income or commission from the foregoing activities. acd Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5