BIR Ruling No. 124-65

November 12, 1965 BIR RULING NO. 124-65 Mr. Daniel Ragasa Certified Public Accountant 171 Sampaloc Avenue Quezon City S i r : In reply to your letter dated October 13, 1965, I have the honor to inform you that the percentage tax payable by the contractor under Section 191 of the Tax Code, is computed on his gross receipts, that is the total amount received by him from the contractee under the contract. Therefore, the separate billing of the tax is not necessary as the percentage tax payable by your client is based on the entire amount received by him from the contractee without any deductions. In your illustrations, viz: Amount of bill before 3% Percentage tax P 97.08 Add: 3% Sales Tax 2.92 Contract Price, tax included P100.00 Add: cost of cuts 2.50 TOTAL BILL P102.50 the amount subject to the 3% tax is P102.50. Very truly yours, (SGD.) MISAEL P. VERA Acting Commissioner of Internal Revenue