Firm Engaged in Leasing Cold Storage Spaces Subject to the 5% Expanded Withholding Tax on Gross Rentals

March 28, 1985 BIR RULING NO. 046-85 53 (f) 160-81 046-85 Gentlemen : This refers to your letter dated March 8, 1985 stating that your company is engaged in the manufacture of food products; that you have been renting a space in a cold storage plant owned by Vifel Ice Plant and Cold Storage, Inc. for the purpose of storing frozen food items. You now request for a ruling on whether or not your rental payments to the said lessor are subject to the 5% expanded withholding tax. In reply, please be informed that pursuant to Section 1(c) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, implementing Section 53(f) of the Tax Code, as amended by P.D. No. 1351, gross rental or other payment required to be made as a condition to the continued use or possession of property, whether real or personal, to which the payor or obligor has not taken or is not taking title, or in which he has no equity exceeding five hundred pesos per contract or payment whichever is greater is subject to 5% expanded withholding tax. Such being the case, a company engaged in the business of leasing cold storage spaces, like the Vifel Ice Plant and Cold Storage, Inc. is subject to the 5% expanded withholding tax on gross rentals exceeding five hundred pesos per contract or payment, whichever is greater pursuant to Section 53(f) of the Tax Code, amended. cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner