Payments Made to Contractors or Sub-contractors of Handicrafts, Basket Weaving, Rattan Framing, and Garment Sewing and Embroidery are Not Subject to Withholding Tax

April 19, 1991 BIR RULING NO. 069-91 50 (b) 588-88 069-91 S i r : This refers to your letter dated February 8, 1991 requesting a ruling as to whether or not payments made to contractors or sub-contractors of handicrafts, basket weaving, rattan framing, and garment sewing and embroidery are subject to the expanded withholding tax. In reply, please be informed that under Revenue Regulations No. 13-78, as amended by Revenue Regulations Nos. 6-79 and 6-85, implementing Sec. 50 (b) of the Tax Code, payments made only to persons enumerated therein are subject to the expanded withholding tax. Considering that payments made to contractors or sub-contractors of handicrafts, basket weaving, rattan framing, garment sewing and embroidery are not among those specified in said Regulations, said payments are not subject to the withholding tax. Since a sub-contractor for the same services is not also one of those enumerated in said Revenue Regulations, it is not subject to the expanded withholding tax. However, since the aforesaid payments are not subject to withholding tax the payor shall render an information return on such payments pursuant to Sec. 61 of the Tax Code, as amended by Batas Pambansa Blg. 135 and as implemented by Sec. 21 of Revenue Regulations No. 1-82 dated March 18, 1982. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner