BIR Ruling No. 061-61

No date supplied BIR RULING NO. 061-61 Respectfully returned to the Honorable, the Secretary of Finance, Manila, the herein papers bearing on the basic communication of Messrs. Ponce Enrile and Associates, with the following comment on the question raised by the latter: In the case of theaters of cinematographs, pursuant to Section 260 of the Tax Code, as amended, the amusement tax herein prescribed shall first be deducted and withheld by the proprietors, lessees, or operators of such theaters or cinematographs, and paid to the Commissioner of Internal Revenue before the gross receipts are divided between the proprietors, lessees, or operators of the theaters or cinematographs and the distributors of the cinematographic films. The rates of amusement tax collectible from the proprietors, lessees or operators of theaters or cinematographs are as follows: cdta Admission Price National tax (Excluding the national & municipal amusement taxes) From P0.21 to P0.29 P0.04 .30 to .39 .06 .40 to .49 .08 .50 to .59 .10 .60 to .69 .12 .70 to .79 .14 .80 to .89 .16 .90 to .99 .18 1.00 up 30% In applying the above rates of amusement tax (national) to the different brackets of admission fees, the basis shall be the price of admission exclusive of the tax . In the determination of the proper bracket, the amount of the national tax should first be deducted from the amount of admission indicated on the face of the admission tickets. [Sec. 3(b), Revenue Regulations No. V-57, dated May 30/57.] In places, however, where the city or municipality imposes municipal amusement taxes, the amount of municipal amusement tax should also be deducted from the price indicated on the face of the ticket. [Sec. 3(d), Revenue Regulations No. V-57, supra.] Accordingly, when the admission prices on the face of the tickets, such as that collected by theaters in the City of Cotabato, are: P0.35, P0.60, P0.75, and P1.10, respectively, and a municipality, by virtue of an ordinance, imposes the following rates: prll P0.03 on every admission ticket sold from P0.20 to P0.50; P0.07 on every admission ticket sold from P0.51 to P1.00; and P0.10 on every admission ticket sold ever P1.00, then the national and municipal amusement taxes, and the basic admission prices may be computed as follows: Admission Price on National Municipal Basic Admission the face of ticket Tax Tax Price P1.10 P0.16 P0.07 P0.87 .75 .10 .07 .58 .60 .08 .03 .49 .35 .04 .03 .28 The national and municipal amusement taxes shown above have been arrived at by excluding said taxes in determining the taxable admission fees. It should be pointed out, however, that Section 260 of the Tax Code, as well as Revenue Regulations No. V-57, considers the amusement taxes as part of the admission fee. As this provision was not incorporated in Ordinance No. 10 (1960) of Cotabato City, this Office cannot vouch for the correctness of the computation of the City amusement tax in this case. LLpr