3% Withholding Tax — Commission of Advertising Agency

July 17, 1979 BIR RULING NO. 063-79 3% Withholding tax commission of advertising agency This refers to your letter dated December 4, 1978 requesting clarification as regards the basis of the 3% withholding tax on income payments to an advertising agency under Revenue Regulations No. 13-78. The billing to the payer/advertiser is as follows: Reference Due to Due to Particulars Invoice Media Agency -15% Total Channel 4 1,850 P3,825.00 P675.00 P4,500.00 Bulletin Today 78070742 2,282.25 403 2,685.00 Add: 3% I.R. Taxes 32.33 32.33 P6,107.25 P1,110.08 P7,217.33 I t is represented that the advertising agency bills you (advertiser) not only on the amount due to it (which is 15% commission) but also the amount due to the media. In reply thereto, please be informed that under the above illustration, the 3% withholding tax is based on the 15% commission of the advertising agency which is the sum of P1,110.08, and the tax withheld therein must be remitted by the withholding agent (payor/advertiser) to this Bureau.