Exemption from Withholding Tax

September 3, 1979 BIR RULING NO. 080-79 Exemption from withholding tax This refers to your letter dated December 22, 1978 requesting a ruling on whether or not shippers or exporters loading goods on foreign vessels for which your company acts as agent, are required to withhold tax under Presidential Decree No. 1351 as implemented by Revenue Regulations No. 13-78 on the freight paid by them to such vessels, considering that you already paid in advance the 2% income tax on their gross Philippine billings and the 2% common carriers tax imposed by Section 24(b)(2) and Section 207 of the National Internal Revenue Code of 1977. It is represented that your company is engaged in the shipping agency business and acts as husbanding agent for several foreign shipping lines with vessels that call at Philippine ports; and that some of these foreign flag vessels on their outward voyages from the Philippines load cargoes for foreign countries. In reply, I have the honor to inform you that under the aforesaid Regulations, payments only to persons enumerated therein are subject to withholding tax. Since payment in the form of freight charges on the goods paid by shippers/exporters to foreign vessels is not one of those specified in the Regulations, the same is not subject to the withholding tax. (BIR Ruling No. 043-79, dated June 21, 1979)