BIR Ruling No. 116-61

February 15, 1961 BIR RULING NO. 116-61 Mr. Frederick Yang 104 Shaw Boulevard Mandaluyong, Rizal S i r : In reply to your letter dated January 31, 1961, I have the honor to inform, you as follows: Pursuant to the P.I.-I.S. Military Bases Agreement as supplemented by the exchange of notes between the Philippines and U.S. Governments on December 29, 1952, any person or entity who, by virtue of a contract with an authorized contractor of the U.S. Military Bases, supplies labor and supervises the construction works in the said Bases in exempt from the 3% tax prescribed in Section 191 of the Tax Code provided that the said contract (sub-contract) is authorized by the aforesaid Bases, no exemption lies. Accordingly, if your sub-contract is authorized by the U.S. Naval Base at Subic Bay, you are exempt from the 3% contractor's tax; otherwise, you are liable thereto. In this connection, however, it is stated that even if you meet all the requisites for exemption from the 3% contractor's tax under the said Agreement, nevertheless, you remain subject to the income and basic residence taxes and, in proper cases, the additional residence tax as well as all other taxes not covered by the aforesaid Agreement. (BIR Ruling No. 256, Series of 1959, dated May 13, 1959). prcd Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue