BIR Ruling

November 16, 1971 Sycip, Gorres, Velayo & Co. Certified Public Accountants P. O. Box 589 Manila Attention: Mr . M . Gutierrez Tax Division Gentlemen : This refers to your letters dated July 27 and November 11, 1971 requesting confirmation of your opinion to the effect that the professional fees to be paid to you by the National Irrigation Administration under an Agreement to render professional management consulting services are not subject to the 3% contractor's tax, such fees being allegedly in payment for professional services directly connected with the exercise of your profession. In reply thereto, I have the honor to inform you that considering the fact that your firm is a partnership of individual professionals (CPAs) engaged in the practice of public accountancy, and considering the fact that the management consulting services rendered by you is a part of the practice of your profession, the professional fees paid by the National Irrigation Administration under agreement entered by your firm with the said government agency is exempt from the contractor's tax imposed in Section 191 of the Tax Code. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue