5% Withholding Tax — Rental Payments to Aircraft Owners

January 29, 1981 BIR RULING NO. 022-81 53-f 000-00 022-81 Miguel Campos Enterprises P.O. Box 1154 Manila Attention: Mr . Antonino S . Bonifacio Accountant Gentlemen : This refers to your letter dated September 22, 1980 requesting a ruling whether your rental payments to aircraft owners are subject to the expanded withholding tax. You have represented that, as a domestic corporation engaged in air-taxi or chartering of light aircrafts to the public. In order to accommodate more clients, you borrow or lease aircrafts, paying the owners thereof rentals based on the number of flight hours the plane was used. In reply, please be informed that your rental payment is required to be made as a condition to the continued use of the aircraft which is considered personal property. Consequently, if the gross rental exceeds P500.00 per contract or payment whichever is greater, the same is subject to the 5% withholding tax, in accordance with Section 1(c) of Revenue Regulations No. 13-78, as supplemented by Revenue Regulations No. 6-79, implementing P.D. No. 1351 (now Section 53(f) of the Tax Code). Very truly yours, RUBEN B. ANCHETA Acting Commissioner