BIR Ruling No. 109-65

September 23, 1965 BIR RULING NO. 109-65 Mr. Rodolfo J. Nacu Mezzanine Floor, Paramount Bldg. 434 Rosario Street M a n i l a S i r : This refers to your letter dated June 9, 1965 requesting information as to the tax liabilities of a business you are contemplating to establish to be operated as follows: You will solicit orders from manufacturers of wheat/cassava flour, sugar and feeds for empty cotton bags; that upon receipt of the purchase order, you buy the corresponding materials and hire the services of another company to do the sewing based on the specification of the customers; and that the contract price shall depend on the nature or type of the empty cotton bags made. In answer thereto, I have the honor to inform you that based on the facts represented you are a manufacturer subject to the P20.00 fixed annual tax and to the 7% sales tax on your gross sales pursuant to Sections 182(A)(1) and 186, both of the Tax Code. On the other hand, the company which will actually do the sewing of the articles is an independent contractor subject to the P20.00 fixed tax and to the 3% tax prescribed by Sections 182(A)(1) and 191 of the same Code. prcd Very truly yours, (SGD.) MISAEL P. VERA Acting Commissioner of Internal Revenue