BIR Ruling No. 032-80

October 23, 1980 BIR RULING NO. 032-80 205(15) 030-79 32-80 Atty. Semaco P. Sacmar Certified Public Accountant 1054 Juan Luna, Manila S i r : This refers to your letter dated January 27, 1979 requesting a ruling in behalf of your client, Marshburn Press (FEBC), Inc., Karuhatan, Valenzuela, Metro Manila, as to the basis of the 3% contractor's tax imposed by Section 205(15) of the Tax Code of 1977, under the following facts: cdt "a) my client provides the printing, publishing and allied services mainly for Far East Broadcasting Co. (Phil.) Inc., FEBC for short, also a non-profit, non-stock, religious corporation; "b) FEBC provides the materials used, consisting of papers, ink and other constituent materials in the printing job; "c) upon completion of the job, my client bills FEBC to sustain payment of salaries, allowances, SSS Medicare, Current, Water and other operating expenses, thus operating in most cases at almost break-even." In reply thereto, I have the honor to inform you that the 3% contractor's tax prescribed by Section 205(15) of the National Internal Revenue Code of 1977 is imposed and collected on the gross receipts derived by the contractor for a particular job. Accordingly, the cost of labor and materials supplied by the contractor in a particular job being a part of the gross receipts is taxable under said section of the Tax Code. However, if the materials are to be supplied by the contractee as in the case of Marshburn Press (FEBC), Inc., your client, as verified upon investigation, the cost thereof, is not part of the taxable receipts for purposes of the percentage tax mentioned above. Accordingly, the basis of the 3% contractor's tax is the actual amount received by your client. aisadc Very truly yours, ROMULO M. VILLA Acting Commissioner