Taxability of a Professional Employed by a Firm

November 2, 1966 BIR RULING NO. 052-66 Messrs. Sycip, Salazar, Luna, Manalo & Feliciano 5th Floor, Trade & Commerce Bldg. 215 Juan Luna, Manila Attention : Mr . Luciano E . Salazar Gentlemen : This refers to your letter dated November 2, 1965 requesting legal opinion on the following queries: cdt "A, a certified public accountant (or any other professional mentioned in Section 182(B) of the Tax Code) is employed by a firm and his duties therein are performed in his professional capacity. Said firm prohibits its professional-employees from engaging in private practice during or after office hours. It is accurate to conclude that A need not pay the annual occupation tax? "Will the occupation tax be imposed if the aforementioned professional, although not permitted by his employer to engage in private practice, actually engage therein?" In reply, I have the honor to inform you that under the final provision of Section 182(B) of the Tax Code, as amended by R.A. No. 4574, the professional referred to in your query is exempt from the payment of the occupational tax provided he is not permitted by his employer to practice his profession to private or personal clientele during or after office hours. However, professionals employed by a firm or professionals are subject to tax, the act of employment itself constituting the practice of their profession. However, if the professional though not permitted by his employer to engage in private practice, actually engaged therein, he is subject to the professional tax for it is the essence of the occupation tax to tax the professional act and not the mere fact of being a professional. lexlib Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue