BIR Ruling No. 023-63

March 25, 1963 BIR RULING NO. 023-63 Mr. Jose M. Sulit 380-G Espaa Extension Quezon City S i r : Reference is made to your letter dated December 5, 1962, requesting information as to the tax status of a so-called agency for collection and delivery of the Famous Dry Cleaners. We are summarizing hereunder the essential provisions of the Agency Contract which you entered into with the Famous Dry Cleaners on August 18, 1962 and submitted with your said letter. As possessor or occupant of a building located in 380-G Espaa Extension, Quezon City, you will operate an agency of the Famous Dry Cleaners. The latter will collect, at its own responsibility, for washing, pressing and/or dry cleaning in its main plant at 3333 Sta. Mesa Blvd., Manila, such clothes, dresses etc. as have been received by you for said purposes, after which the same will be sent back to you for delivery to the customers. As operator of such agency, you are authorize to collect, demand, receive and receipt for, in the name and behalf of the Famous Dry Cleaners, all money due the agency on account of its services, and such money shall be held by you in trust for the Famous Dry Cleaners and turned over to the latter from time to time as agreed upon in the contract. As compensation, you are entitled to 20% the gross income of the agency. cdpr In answer thereto, I have the honor to inform you that under the circumstances, the so-called agency is constituted essentially as a branch establishment. Since business is transacted therein, it is subject to privilege and percentage taxes separate and distinct from that being paid by the main establishment, pursuant to Section 178 of the Tax Code. The privilege tax is P20.00 per annum, and net P10.00. (Section 182(A)(1), Tax Code). Under the agency contract, you are not subject to any privilege or percentage tax as an agent. prcd Very truly yours, (SGD.) JOSE B. LINGAD Acting Commissioner of Internal Revenue