Exemption from the Payment of 3% Contractor's Tax — Carwashing Services

July 20, 1981 BIR RULING NO. 112-81 205-00 256-59 112-81 M.C. General Services, Inc. 777 San Rafael Street Plainview, Mandaluyong Metro Manila Attention: Mr . Modesto D . Cruz General Manager S i r : This refers to your letter dated April 22, 1981, requesting for a ruling as to whether your company, which was contracted by the United States Naval Base Authorities to render carwashing services inside the United States Naval Base in Subic Bay, is exempt from the payment of the 3% contractor's tax. In reply, I have the honor to inform you that your company, which is rendering carwashing services inside a U.S. Military Base by virtue of a contract with Base Authorities, is exempt from the payment of 3% contractor's tax, in accordance with Article XVIII of the P.I. U.S. Military Bases Agreement. (Araneta vs. Manila Pencil Co., G.R. No. L-8182, June 29, 1957) You are, however, subject to pay income tax on whatever income derived from the work done within the Base. (Canlas vs. Republic of the Philippines, G.R. No. L-11305, May 21, 1958; Naguiat vs. Araneta, G.R. No. L-11594, December 22, 1958) cdtech Very truly yours, RUBEN B. ANCHETA Acting Commissioner