Salaries Paid by Watchman Agencies to Their Guards Form Part of Their Taxable Receipts

February 17, 1969 BIR RULING NO. 002-69 Col. Juan D. Crisologo, (RET) Retired Army Protective & Security Agency, Inc. 268 Camagong St., San Antonio Village Makati, Rizal S i r : This refers to BIR RULING NO. 65-103 dated September 17, 1965 issued to yourselves wherein it was held that the amount corresponding to the salaries of the guards that you employ does not form part of your gross receipts for purposes of the 3% tax prescribed by Section 191 of the Tax Code. In this connection, please be informed that after a re-evaluation of the tax status of watchman agencies, this Office arrived at the opinion that the salaries paid by these agencies to their guards form part of their taxable receipts. This is for the reason that the salaries of the guards are actually the liability of the agencies and that the guards are considered their employees. Accordingly, Ruling No. 65-103 is hereby revoked. You are, therefore, advised to be guided accordingly. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue