Whether a Practicing Architect is Subject Only to Income Tax and Not to Any Business Tax Like the VAT

March 7, 1995 BIR RULING NO. 051-95 103 (r) 000-00 051-95 FL Mayo Design 256 Santolan St., San Juan, Metro Manila Attention: Mr . F . L . Mayo Gentlemen : This refers to your letter dated November 2, 1994 requesting a ruling as to whether or not a practicing architect is subject only to income tax and not to any business tax like the VAT. It is represented that on June 18, 1993, you filed an application for a business name with the Department of Trade and Industry; and that you will practice your profession and render project management services under your business name of "FL Mayo Design" which is a single proprietorship. In reply thereto, please be informed that income derived by you from services performed in the exercise of your profession shall be subject to income tax under Section 21 (f) of the Tax Code, as amended. However, pursuant to Section 103(r) of the Tax Code , prior to its amendment by of R.A. 7716 otherwise known as the Expanded VAT Law, the implementation of which is suspended in view of the temporary restraining order issued by the Supreme Court on June 30, 1994. (Arturo M. Tolentino vs. the Secretary of Finance and the Commissioner of Internal Revenue, G.R. No. 115455), services performed in the exercise of profession of calling (except customs brokers) subject to the professional/occupation tax under the Local Government Code shall not be subject to the VAT until May 28, 1996. cdta Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue