Whether the Subscription Fee Payable to RRP Multi-Business Center Philippines is Subject to the Expanded Withholding Tax and the Rate Applicable, Whether 5% as Lessor of Personal Property or 3% of 15% as Other Contractor

February 14, 1991 BIR RULING NO. 023-91 50 (b) 000-00 023-91 Gentlemen : This refers to your letter dated November 5, 1990, requesting in behalf of your client, Smiles International, Inc., a ruling as to whether or not the subscription fee payable by it to RRP Multi-Business Center Philippines is subject to the expanded withholding tax and the rate applicable, whether 5% as lessor of personal property or 3% of 15% as other contractor. It is represented that your client entered into a subscription contract with RRP-Business Center Philippines for the use of the latter's business address, telephone, receiving and safekeeping of mails (mail forwarding) and taking and relaying of telephone messages (answering services); and that the full amount of the subscription fee payable by your client for such services rendered by RRP Multi-Business Center Philippines is P3,000.00. In reply, please be informed that under Revenue Regulations No. 6-85, as amended, otherwise known as the Revised and Expanded Withholding Tax Regulations implementing Section 50(b) of the Tax Code, only payments to persons enumerated therein are subject to the expanded withholding tax. Considering that payments for the use of another's business address, telephone, mail forwarding and answering services are not among those specified in said Regulations, such payments are, therefore, not subject to the expanded withholding tax. However, since the aforesaid payments are not subject to the withholding tax, the payor shall render an information return on such payments pursuant to Section 61 (formerly Section 7) of the Tax Code, amended by Batas Pambansa Blg. 135 and as implemented by Section 21 of Revenue Regulations No. 1-82 dated March 18, 1982. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner