10% Withholding Tax — Rental Payment

August 13, 1979 BIR RULING NO. 073-79 10% Withholding tax rental payment This refers to your letter dated June 29, 1979 requesting information as to whether rental payments made by Chambon Engineering of Singapore for the use of your house by one of its employees a foreigner named, Pierre Pams is subject to the withholding tax provisions of Presidential Decree No. 1351 as implemented by Revenue Regulations Nos. 13-78 and 6-79. It is represented that Chambon Engineering of Singapore sent to the Philippines Mr. Pierre Pams for the purpose of seeing potentiality of setting up a business venture; and that Mr. Pams rented out your residential house but the rentals are paid directly by his company in Singapore. In reply thereto, please be informed that rental payments exceeding P500.00 are subject to 5% withholding tax in accordance with Section 1(c) of Revenue Regulations Nos. 13-78 and 6-79. However, since the payor thereof is a foreign company which is not yet doing business in the Philippines, said payment is not subject to withholding tax, as the payor is beyond the taxing jurisdiction of the Philippines.