BIR Ruling [DA-300-04]

June 1, 2004 BIR RULING [DA-300-04] 22 (B); 018-99 Luis and Associates, Co. 6 Benito Soliven Avenue 1 Loyola Grand Villas, Quezon City Attention: Arch. Jaime C. Marquez and Arch. Prosperidad C. Luis Gentlemen : This refers to your letter dated March 8, 2004 requesting for a ruling concerning your intention to register with the Bureau of Internal Revenue your proposed joint venture in order to secure an authority to print receipts. It is represented that Luis and Associates, Co. and J.C. Marquez Architect & Consultants are two independent existing firms; that the former is registered with the Securities and Exchange Commission under SEC Reg, No. AP093-001222 on August 4, 1993 while the latter is registered with the Department of Trade and Industry under Certificate No. 00203292 valid until September 30, 2008; and that a Joint Venture Agreement has been executed by Luis and Associates, Co. and J.C. Marquez, Architect & Consultants to perform the requirements of the Bangko Sentral ng Pilipinas (BSP) to undertake the consultancy services for the Rehabilitation and Upgrading of the Security Plant Complex (SPC) Buildings and Premises and Provision of Space for Cash Management and Operations In reply, please be informed that pursuant to Section 22(B) of the Tax Code of 1997, the term "corporation" shall include partnerships, no matter how created or organized, joint stock companies, joint accounts ( cuentas en participacion ), associations or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government. Hence, the joint venture of Luis and Associates, Co. and J.C. Marquez, Architect & Consultants to undertake the consultancy services for the Rehabilitation and Upgrading of the Security Plant Complex (SPC) Buildings and Premises and Provision of Space for Cash Management and Operations is not subject to the corporate income tax under Section 27(A) of the Tax Code of 1997. However, the co-venturers are separately subject to the regular corporate income tax on their taxable income during each taxable year respectively derived by them from the aforesaid consultancy project. ( BIR Ruling No. 018-99 dated February 11, 1999 ) The said Joint Venture may register with the Revenue District Officer having jurisdiction over the business on or before the commencement of their business pursuant to the provisions of Section 236 of the Tax Code of 1997. The registration shall contain the taxpayer's style, place or residence, business, and such other information as may be required by the Commissioner in the form prescribed therefor. Thereafter, a Taxpayer Identification Number (TIN) shall be assigned to the Joint Venture, which it shall indicate in all its transactions. As provided for in Section 238 of the Tax Code of 1997, to wit: "SEC. 238. Printing of Receipts or Sales or Commercial Invoices . All persons who are engaged in business shall secure from the Bureau of Internal Revenue an Authority to print receipts or sales or commercial invoices before the printer can print the same. DCHaTc No authority to print receipts or sales or commercial invoices shall be granted unless the receipts or invoices to be printed are serially numbered and shall show, among other things, the name, business style, Taxpayer Identification Number (TIN) and business address of the person or entity to use the same, and such other information that may be required by rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner." the Joint Venture shall secure an Authority from the Revenue District Office No. 40, Cubao, Quezon City, Revenue Region No. 7, Quezon City in the printing of Receipts or Sales or Commercial Invoice. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling will be considered null and void. aTEHCc Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group