BIR Ruling [DA-263-06]

April 12, 2006 BIR RULING [DA-263-06] RMC No. 11-06 Mr. Simplicio M. Lerias 154 Quezon St. Molave, Zamboanga del Sur S i r : This refers to your letter dated August 21, 2005 requesting for a ruling on whether or not insurance agents like yourself are required to be registered as VAT or Non-VAT taxpayer. As represented, you are a sixty-six (66)-year old insurance agent deriving income exclusively from commissions paid by insurance companies who automatically deduct 10% withholding tax from your commission. In reply, please be informed that insurance agents and/or brokers have been subjected to VAT since January 1, 1988 under Executive Order No. 273 and continue to be liable to the payment of the 10% VAT. Those whose taxable gross receipts during any 12-month period exceed PhP550,000 pursuant to Section 109(z) of the Tax Code of 1997 (now PhP1,500,000 pursuant to Section 109(V) of R.A. No. 9337) are required to register as VAT-taxpayers and pay the PhP1,000 (now PhP500 pursuant to Section 236(B) of the Tax Code of 1997) annual registration fee. Those whose gross receipts exceed PhP100,000 but do not exceed PhP500,000 for any 12-moth period are required to register as non-VAT taxpayer and pay the PhP1,000 (now PhP500) registration fee. They shall be subject to the 3% tax imposed under Section 112 (now Section 116) of the Tax Code of 1997. They, however, have the option to register as VAT taxpayers (Revenue Memorandum Circular No. 11-96). In view of the foregoing, this Office hereby holds that your are required to register as VAT or Non-VAT taxpayer, as the case may be. This ruling is being issued on the basis of the foregoing facts as represented. However, it upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered as null and void. ECTIHa Very truly yours, (SGD.) PABLO M. BASTES, JR. OIC-Head Revenue Executive Assistant Legal Service