BIR Ruling [DA-339-03]

October 7, 2003 BIR RULING [DA-339-03] 57; 68; 27 (A) DA-343-00; 076-93 Winner Garments Manufacturing, Inc . PI JY & Sons Compound Veterans Center, Taguig Metro Manila Attention: Ms. Teresita S. Opea Officer-External Accounting Gentlemen : This refers to your letter dated September 26, 2001 requesting clarification if sewing subcontractors, like your company, who are accepting jobs from direct and principal exporters of garments are subject to withholding tax on your collections for services rendered and if laundry businesses rendering services to exporters are likewise subject to withholding tax on receipts for services rendered. In reply, please be informed that under Revenue Regulations No. 2-98 as amended by Revenue Regulations No. 6-2001 implementing the provisions of Section 57 of the Tax Code of 1997, payments only to persons enumerated therein are subject to the expanded withholding tax. Considering that payments for supplying sewing services and laundry services are not among those specified in the said Regulations, such payments are not, therefore subject to the expanded withholding tax. Since the aforesaid payments are not subject to the withholding tax, the payor shall render an information return on such payments pursuant to Section 68 of the Tax Code of 1997 (BIR Ruling No. 076-93 dated March 1, 1993). However, you shall be subject to the corporate income tax prescribed under Section 27(A) of the Tax Code of 1997. (BIR Ruling No. DA-343-00 dated September 11, 2000) 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 shall be considered null and void. ETIHCa Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group