5% Withholding Tax — Social Welfare Organization

February 5, 1980 BIR RULING NO. 013-80 The Regional Director Revenue Region No. 10-A Cagayan de Oro City S i r : This refers to your request for information as to whether or not the withholding tax provisions of Revenue Regulations No. 13-78 implementing Presidential Decree No. 1351 apply to the rental you pay to the Boy Scouts of the Philippines, Misamis Oriental chapter, as the lessor of the building where your regional office is housed. cdt In reply, please be informed that the Boy Scouts of the Philippines is a social welfare organization (BIR Ruling No. 143-79 dated December 27, 1979); hence said organization is exempt from income tax. (Section 27(g), Tax Code of 1977, as amended) However, the income derived by the organization from any of its properties is subject to internal revenue taxes regardless of the disposition made of such income. (Sec. 27, Tax Code, as amended by P.D. No. 1457). Such being the case, the rentals paid by that Office, being income derived by the Boy Scouts of the Philippines from its properties, is subject to income tax and consequently, to the 5% withholding tax if the gross rental or other payment exceeds P500.00 per contract or payment whichever is greater. (Sections 1(c) and 4(c), Revenue Regulations Nos. 13-78, as amended by Revenue Regulations No. 6-79 implementing Presidential Decree No. 1351). cdt Very truly yours, RUBEN B. ANCHETA Acting Commissioner