Payments for Pest/Insects Control Not Subject to Withholding Tax

July 31, 1985 BIR RULING NO. 115-85 53 (f) 000-00 115-85 Gentlemen : This refers to your letter dated June 4, 1985 requesting a ruling as to whether or not your business enterprise which is engaged in the control and extermination of pest/insects like roaches, rats and flies as well as termites in household and structural residences and buildings is subject to the expanded withholding tax. You also want to know whether payment to a subcontractor for a certain job and payment for a solicited advertisement by an association or clubs for inclusion in their organs or souvenir programs are likewise subject to the expanded withholding tax. In reply, please be informed that under Revenue Regulations No. 13-78, as amended by Revenue Regulations Nos. 6-79 and 6-85, implementing section 53(f) of the Tax Code, payments only to persons enumerated therein are subject to the withholding tax. Considering that payments for pest/insects control are not among those specified in said Regulations, said payments are not subject to the withholding tax. Since a subcontractor for the same services, is not also one of those enumerated in said Revenue Regulations, it is not subject to the expanded withholding tax. On the other hand, if the payee-subcontractor rendering the service is one of those enumerated in the same Regulations, it is subject to the expanded withholding tax, the reason being that while a subcontractor is not subject to the 4% contractor's tax which is a business tax, the expanded withholding tax is a creditable income tax. However, since the aforesaid payments are not subject to withholding the payor shall render an information return on such payments pursuant to Section 77 of the Tax Code, as amended by Batas Pambansa Blg. 135 and as implemented by Section 21 of Revenue Regulations No. 1-82 dated March 18, 1982. Moreover, payments for solicited advertisements by an association or clubs for inclusion in their souvenir programs are not subject to the expanded withholding tax. cdtech Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner