Regular Taxes Imposed on Persons Enjoying Exemptions from or Any Preferential Treatment in the Payment of Internal Revenue Taxes under Special Laws

February 9, 1987 BIR RULING NO. 032-87 19 000-00 032-87 Gentlemen : In reply to your letter dated January 26, 1987 I have the honor to inform you that subject to certain conditions, P.D. No. 1955 which took effect on October 15, 1984 withdrew all exemptions and preferential tax treatments and/or privileges granted under special laws, executive orders and letters of instructions to private business enterprises and persons engaged in any economic activity. Accordingly, beginning October 15, 1984 all persons heretofore enjoying exemptions from or any preferential treatment in the payment of internal revenue taxes under special laws, like the players in professional tournaments sanctioned by and/or sponsored by the Philippine Golf Foundation (formerly called Marcos Golf Foundation) and the professionals in the PRO-AM tournament with respect to the cash prizes awarded to them under P.D. No. 1783 dated January 15, 1981, are now subject to the regular taxes applicable to them under the National Internal Revenue Code. In view thereof, this Office is of the opinion as it hereby holds that in the case of players/participants of said tournaments who are citizens or resident aliens, cash prizes amounting to more than P3,000 shall be subject to a final tax of 20% pursuant to Section 21(c)(1) of the Tax Code as amended by Executive Order No. 37 which took effect August 1, 1986 while cash prizes amounting to P3,000 or less shall be subject to tax under Section 21(a) of the same Code. However, in the case of players/participants who are non-resident aliens not engaged in trade or business in the Philippines (their stay in the Philippines is for 180 days or less), their cash prizes shall be subject to a tax of 30% on the total amount thereof pursuant to Section 22(b) of the Tax Code as amended by Executive Order No. 37. atdc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner