Payments to Washing Companies Not Subject to the Expanded Withholding Tax

January 15, 1996 BIR RULING NO. 005-96 50 (b) 000-00 005-96 Ralph Garment Manufacturing Corporation No. 6 Main Avenue, Km. 16 Severina Industrial Subdivision Paraaque, Metro Manila Attention: Mr . Norman Michael C . Lim General Manager Gentlemen : This refers to your letter dated October 6, 1995, which was referred to this Office by the Assistant Regional Director of Revenue Region No. 8, Makati City, bearing on your request for ruling as to whether your payments to washing companies are subject to the expanded withholding tax. cdll It is represented that you are a 100% garment manufacturer/exporter since 1989 and registered with the BIR as a zero-rated VAT taxpayer; and that you did not withhold the 1% credible expanded withholding tax on your income payments to washing companies. In reply, please be informed that under Revenue Regulations No. 6-85, as amended, implementing Section 50(b) of the Tax Code, as amended, payments only to persons enumerated therein are subject to the expanded withholding tax. Considering that payments to washing companies are not among those specified in said regulations, such payments to your washing companies are not, therefore, subject to the expanded withholding tax. However, you as payor shall render an information return on such 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. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue