EPZA-registered Export Producers Exempt from Contractor's Percentage Tax and Annual Fixed Tax

January 17, 1984 BIR RULING NO. 008-84 205-00-000-00-008-84 Gentlemen : This refers to your letter dated October 20, 1982 requesting a ruling on your tax liabilities under your sub-contract agreement with McKee Industries, Inc. whereby local beans belonging to the latter will be processed into cocoa and cocoa butter at your factory at the Export Processing Zone (EPZA), Mariveles, Bataan. The records indicate that both your company and McKee Industries, Inc., are BOI-registered export producers and registered with the EPZA Zone, Mariveles, Bataan. In reply, please be informed that under your sub-contract agreement with McKee Industries, Inc., whereby your company will process the latter's local beans into cocoa butter and powder, you are an independent contractor; however, your gross receipts is exempt from the contractor's tax prescribed under Section 205 of the Tax Code, pursuant to Section 1, Presidential Decree No. 1716, which states: "SEC. 1. Gross receipts of or from registered zone enterprises shall be exempt from the contractor's tax under Section 205 of the Tax Code of 1977, as amended." Since you are exempt from the contractor's percentage tax, you are also exempt from the annual fixed tax of P100.00 prescribed under Section 192(1) of the same Code. cdta Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner