BIR Ruling No. 079-82

March 15, 1982 BIR RULING NO. 079-82 205 000-00 079-82 SWAMAG Room 221 Buendia Commercial Center Building 2125 Taft Avenue, Pasay Metro Manila Attention: Ms . Auxiliadora R . Opeda Accountant Gentlemen : This refers to your letter dated February 18, 1981 in behalf of your client who is engaged in the contract of growing chicks, requesting in effect a ruling whether or not it is subject to any business tax. It is represented that General Milling Corporation, a corporation engaged in poultry raising, supplies your client with one-day old chicks together with the proper feeds and medicines adaptable to the various stages of the chicks; that to ensure the steady and profitable growth of the chicks, your client buys feeds and medicines to supplement those supplied by General Milling Corporation; that your client shoulders all expenses relative to the growing of the chicks like poultry houses, electricity, water, labor, etc.; that when the chicks are ready for market, they are picked up by General Milling Corporation who pays your client an agreed sum, deducting the cost of the day old chicks; that the number of chicks that die will be deducted from the amount due to your client; that there are times that almost all or all of the bunch of chicks die leaving your client at a deficit; and that the deficit will be deductible from future deliveries until the deficit is paid off. In reply, I have the honor to inform you, that your client by supplying principally the labor in the growing of the chicks is considered an independent contractor subject to the P100.00 fixed annual tax pursuant to Section 192(1) of the Tax Code, as amended, and to gross receipts, i.e. the whole amount paid by the General Milling Corporation to your client is subject to the 3% tax imposed in Section 205 of the Tax Code. Very truly yours, RUBEN B. ANCHETA Acting Commissioner