Exemption from Withholding Tax — Membership Dues

December 7, 1979 BIR RULING NO. 103-79 Exemption from withholding tax membership dues . This refers to your letter dated August 8, 1979 requesting, on behalf of your client, the Makati Commercial Estate Association, Inc. (formerly Ayala Avenue-Paseo de Roxas Association, Inc. then Ayala Commercial Estate Association, Inc.) exemption from the withholding tax provisions of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, both implementing Presidential Decree No. 1351 regarding membership dues payable to your client by its members. It appears that your client has been granted exemption from the payment of income tax and filing of the corresponding income tax return under the provisions of Section 27(g) of the Tax Code of 1977, as amended; and that the membership dues assessed by your client against its members are later on disbursed by it to maintain its activities. 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 membership dues payable to your client by its members are not among those specified in the Regulations, they are not subject to the withholding tax. Moreover, since your client is an exempt organization under Section 27 of the Tax Code and considering that the membership dues are not income derived from real or personal property, or from any activity conducted for profit, said membership dues are not subject to withholding tax. (Sec. 4(b), Revenue Regulations No. 13-78, as amended).