Tax Liability of a Real Estate Dealer

January 28, 1960 BIR RULING NO. 081-60 P. Lovina & Company, Inc. 419-421 Roman R. Santos Bldg. Plaza Goiti, Manila Attention : Mr . Moises C . Angeles Asst . Treasurer Gentlemen : Reference is made to your letter dated January 20, 1960 wherein you state the following: "During 1958, we had income from real estate transactions for which we paid P500.00 as privilege tax (real estate dealer) for 1959, per OR No. A 079060 dated January 19, 1959. In 1959, however, no income whatsoever was derived by us which would classify our company as real estate dealer in that year. Under the circumstances, must we still renew our privilege tax for 1960 notwithstanding the fact that we derived no income from real estate transactions in 1959"? In reply thereto, I have the honor to inform you that section 178 of the National Internal Revenue Code provides in part: "A privilege tax must be paid before any business or occupation . . . can be lawfully begun or pursued." LLphil You are admittedly, still in the pursuit of your business of buying and selling real property. Consequently you are considered a real estate dealer subject to the minimum annual fixed tax of P150.00 for the year 1960, prescribed in section 182(A)(3)(s) of the said Code, notwithstanding the fact that you did not derived income from your real estate transactions for the year 1959. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue