Whether a Mere Employee is Only Obligated to File an Individual Income Tax Return (BIR Form No. 1701A) and to Pay the Corresponding Income Tax Due Thereon

April 11, 1995 BIR RULING NO. 068-95 21 (a) 000-00 068-95 Ms. Margareth F. Ty 15 C. P. Garcia Street Phase 5, Pacita Complex I San Pedro, Laguna M a d a m : This refers to your letter dated November 15, 1994, stating that you applied for and was appointed as a Computer Programmer of a certain company effective October 27, 1994 for a duration of six (6) months; that your services are not open to others but only to the client of your employer company; that as a mere employee, you are receiving salary every 15th and 30th day of the month; that you are not provided with any official receipts, books of accounts, etc; and that you were informed by your employer that 1% withholding tax will be deducted from your salary. Based on the foregoing representations, you are requesting confirmation of your opinion that being a mere employee, you are only obligated to file an individual income tax return (BIR Form No. 1701A) and to pay the corresponding income tax due thereon. In reply, please be informed that this Office hereby confirms your opinion. Although you are rendering your services to a client of the company which hired your services, the fact remains that you are directly under the control and supervision of the latter. In short, since your category is that of an employee and not a person engaged in the sale of computer services, your compensation income is exempt from the 1% creditable expanded withholding tax under Revenue Regulations No. 6-85, as amended, regardless of the amount paid. However, your employer is required to deduct from you compensation income the corresponding withholding tax pursuant to Revenue Regulations No. 6-82, as amended by Revenue Regulations No. 12-86, as further amended by Revenue Regulations No. 4-93, otherwise known as the Withholding Tax Regulations on Compensation. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue