BIR Ruling [DA-315-96]

August 21, 1996 BIR RULING [DA-315-96] Eastman Garment Mfg. Corp. 53 Scout Torillo St., Cor. Scout Borromeo St. Diliman, Quezon City Attention: Mr. Alfredo Tan General Manager Gentlemen : This refers to your letter dated August 8, 1996 stating that you are a garment manufacturing company; and that you hire the services of contractors for laundry, embroidery, sewing, dying, washing, bleaching and finishing. Based on the foregoing, you now request for exemption from tax expanded withholding tax on your payment to the said contractors. In reply, please be informed that payments only to persons enumerated in Revenue Regulations No. 6-85, as amended, implementing Section 50 (b) of the Tax Code, as amended, are subject to the expanded withholding tax. Considering that payments to contractors of textile finishers, such as laundry, embroidery, sewing, dying, washing, bleaching and finishing of textiles are not among those specified in said Regulations, payments made to your contractors are not, therefore, subject to the expanded withholding tax. However, since payments made to such contractor are not subject to withholding tax, the payor shall render an information return on its payments pursuant to Section 61 of the Tax Code, as amended by Batas Pambansa Blg. 135 and as implemented by Section 21 of Revenue Regulations No. 1-82 dated March 18, 1982. (BIR Ruling No. 064-89 dated April 7, 1989) CSaITD Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: (SGD.) ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)