Correct Rate of Expanded Withholding Tax Applicable

April 11, 1994 BIR RULING NO. 092-94 50 (b) 000-00 092-94 Feedline Enterprises 509 Makisig Street, Bacood Sta. Mesa, Manila Attention: Mr . Federico A . Azarcon General Manager Gentlemen : This refers to your letter dated December 14, 1993, requesting information as to the correct rate of expanded withholding tax applicable to you. It is represented that ARL Panamax Shipping, Inc. engaged your services to grind and polish the former's "SUMIYOSHI" diesel engine Main Journals Nos. 1 & 2; that the contract price is P35,000.00 but before making money payment to you, your client deducted therefrom the amount of P3,500.00 as 10% withholding tax but which you claimed should only be 1%; hence, this request for clarification. In reply, please be informed that for undertaking the aforesaid job, you fall under the classification of specialty contractor. As such, you are subject to the 1% expanded withholding tax (EWT) pursuant to Section 1(e)(1)(c) of Revenue Regulations No. 6-85, as amended, implementing Section 50(b) of the Tax Code, as amended. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue