Payments by Travel Agencies on Commissions to Sales Representatives Not Subject to Withholding Tax

January 13, 1982 BIR RULING NO. 005-82 53 (f) 000-00 005-82 Regal Travel Service, Inc. Don Santiago Building 1344 Taft Avenue, Manila Attention: Mr . Tirso B . Reyes, Jr . Comptroller Gentlemen : This refers to your letters dated November 21, 1980 and September 14, 1981, requesting clarification on whether payments of commissions to your sales representatives are subject to the expanded withholding tax. In reply, I have the honor to inform you that payments made by travel agencies by way of commissions to their sales representatives are not subject to the withholding tax inasmuch as they are not among those enumerated as subject to the expanded withholding tax under Revenue Regulations No. 13-78 and Revenue Regulations No. 6-79 dated June 4, 1979, implementing Presidential Decree No. 1351 now Section 53 (f) of the Tax Code. However, if the sales representatives are your employees, the commissions received by them shall form part of the remuneration for services rendered, subject to withholding tax on wages prescribed in Chapter XI, Title II of the Tax Code, and Revenue Regulations No. V-8, as amended. Very truly yours, RUBEN B. ANCHETA Acting Commissioner