10% Withholding Tax

August 20, 1979 BIR RULING NO. 076-79 10% Withholding tax This refers to your letter dated April 30, 1979 stating that you are a registered civil engineer who works as an Engineering Consultant in the National Irrigation Administration (NIA) and that the NIA has been deducting from your professional fees the 3% contractor's tax and 10% withholding tax. You alleged that you inspect projects that are financed by the World Bank and that you are not involved in actual construction projects. You would like to know whether you are liable for the payment of the 3% contractor's tax. In reply, please be informed that under the abovementioned facts , you are not a contractor; hence, you are not subject to the 3% contractor's tax imposed by Section 205 of the Tax Code of 1977. Such being the case, NIA is not obliged to withhold any 3% contractor's tax from your professional fees as required by Republic Act No. 1051. cdtech However, as an engineering consultant in the NIA, you are individually engaged in the practice of your profession as a civil engineer. Such being the case, the professional fees payable to you by the NIA are subject to the 10% withholding tax prescribed by Revenue Regulations Nos. 13-78 and 6-79, implementing Presidential Decree No. 1351, otherwise known as the Expanded Withholding Tax System.