BIR Ruling No. 090-62

August 16, 1962 BIR RULING NO. 090-62 The Philippine Free Press P. O. Box 457, Manila Attention : Mr . A . R . Torres Information Department Gentlemen : In answer to the queries of Mr. Emilio C. Sagadraca and Mrs. Anita Y. Sanchez, which were referred to this Office in your letter dated October 17, 1961, I have the honor to inform you as follows: cd An operator of a theatre or "cine" is not subject to the tax prescribed in Section 182 of the Tax Code. Neither is he subject to any other business of occupation (privilege) tax. An amusement tax is one imposed on the proprietors, lessees or operators of theaters and other places of amusement under Section 260 of the Tax Code, while a percentage tax is one imposed on the importers, manufacturers, producers, millers and others, contractors, common carriers and brokers mentioned in Sections 183(b), 184, 185, 186, 189, 190, 191, 192, and 195 of said Code. The organization and pre-operating expenses of a corporation are not deductible expenses for income tax purposes. Neither are they chargeable against the retained earnings of the corporation. However, where the charter of a corporation limits its existence to a fixed term, organization expenses may be amortized over such term (Hershey Mfg. Co. vs. Comm. 43 F(2d) 298, cited in Amansec, The Law on Income Taxation, First Ed., p. 183.) As requested, the letters of Mr. Sagadraca and Mrs. Sanchez are herewith returned. liblex Very truly yours, JOSE B. LINGAD Acting Commissioner of Internal Revenue