3% Contractor's Tax — Independent Contractor

May 13, 1980 BIR RULING NO. 054-80 Tanjuatco, Oreta, Tanjuatco & Factoran 4th Flr. Equitable Bank Bldg. Paseo de Roxas and Buendia Avenue Makati, Metro Manila Gentlemen : This refers to your letter dated December 20, 1979 requesting clarification, on behalf of your client, Hotel Development and Management Expediters, Inc., as to whether it is subject to the 3% contractor's tax. It is represented that the principal purpose of your client is to expedite, accelerate, facilitate and enhance the process or progress of any trade, business or transaction and/or the management thereof by rendering consultancy services and other means; that in the ordinary course of its business, it entered into an agreement with Philippine Tourism Authority whereby it will provide its services consisting in the preparation of analysis of the potential of the Ilocos Region, a plan for the national development of the Ilocos Region as a primary and secondary tourist destination and an approach to marketing the Ilocos Region and the Paoay Tourism Complex as a new international and domestic tourist destination. In reply, I have the honor to inform you that under the foregoing facts, your client falls under the purview of an independent contractor under Section 205 of the National Internal Revenue Code, as amended. Consequently, your client is subject to the P100.00 fixed tax prescribed in Section 192(1) of the National Internal Revenue Code, as amended, and its receipts derived from the activities described in your letter is subject to the 3% contractor's tax under Section 205 of the same Code. The ruling cited in your letter has already been superseded by P.D. No. 69, amending Section 191 (now 205) of the Tax Code, when the definition of the term "independent contractor" was incorporated in the law. Very truly yours, EFREN I. PLANA Acting Commissioner