Exemption from Expanded Withholding Tax

June 16, 1980 BIR RULING NO. 073-80 Atty. Mila Rosario R. Taruc Executive Director Free Legal Assistance Office Ministry of Labor Phoenix Bldg., Intramuros, Manila M a d a m : This refers to your letter dated March 19, 1980 requesting confirmation of your opinion that amounts paid to you as Executive Director of the Free Legal Assistance Office, Ministry of Labor are not subject to the expanded withholding tax. In reply, please be informed that the payments to you as an Executive Director of the Free Legal Assistance Office are not subject to the expanded withholding tax prescribed by Revenue Regulations No. 13-78 as supplemented by Revenue Regulations No. 6-79 both implementing P.D. No. 1351 but to the withholding tax under Chapter XI, Title II of the National Internal Revenue Code as amplified by Revenue Regulations No. V-8, as last amended by Revenue Regulations No. 2-79. Being employed as Executive Director of the Ministry of Labor's Free Legal Assistance Office, an employer-employee relationship exists between you and the Ministry of Labor. Employer-employee relationship exists only where the person for whom the work is done has the right to control and direct the work not only as to the result to be accomplished by the work, but also as to the details and means by which that result is accomplished. (See Revenue Regulations No. V-8, supra ) It is clear that you are an employee of the Ministry of Labor as you are appointed by the President under P.D. 1366, creating the Free Legal Assistance Office, which has the right to direct and control the performance of your services, both as to the result to be accomplished as well as to the details and means that are to be utilized in its accomplishment. Very truly yours, RUBEN B. ANCHETA Acting Commissioner