Proper Rate of Withholding Tax to Be Imposed on Payments for Newspaper Advertisements

May 25, 1984 BIR RULING NO. 102-84 53-f; 205-000-73-102-84 Gentlemen : This refers to your letter dated January 31, 1984 requesting in effect a ruling as to the proper rate of withholding taxes that should be imposed on your payments to Link Advertising, Inc. for your advertising insertions in the following newspapers, viz: Invitation to Bid Times Journal 16 Dec. 1983 (NFDPBD-S-1) Daily Express 16 Dec. 1983 Bulletin Today 17 Dec. 1983 Invitation to Bid Times Journal 18 Dec. 1983 (IBRD Loan No. 2156PH) Daily Express 18 Dec. 1983 Bulletin Today 18 Dec. 1983 In reply, please be informed that your gross payments to Link Advertising, Inc. exclusive of the amount intended for the media, for the aforesaid advertisements are subject to the 3% contractor's tax under Section 205 of the Tax Code, as amended. The said taxes shall be withheld and paid by you pursuant to Republic Act No. 1051 as implemented by Revenue Regulations No. 4-83 dated March 4, 1983. Moreover, for income tax purposes, 15% of said income payments exclusive of the amount that goes to the media, shall also be subject to the 3% expanded withholding tax under Section 1(e)(2)(g) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79 implementing Presidential Decree No. 1351, now Section 53(f) of the Tax Code, as amended. In other words, that portion of the amount received by Link Advertising, Inc. corresponding to compensation paid for services rendered by the media, i.e., Times Journal, Daily Express and Bulletin Today should not be included as part of its gross receipts subject to the withholding provisions of Revenue Regulations No. 4-83 implementing Republic Act No. 1051. cdta Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner