Income or Commissions Received by Commercial Brokers are Subject to 5% Withholding Tax

June 28, 1991 BIR RULING NO. 127-91 50 (b) 000-00 127-91 Gentlemen : This refers to your letter dated April 19, 1991 stating that AGJ Securities Corporation is a domestic corporation duly organized and existing under Philippine laws; that said corporation mainly deals with the buying and selling of securities; that as such, said corporation has or acts through "agents" who are duly licensed by the Securities and Exchange Commission as "salesmen"; that though said agents are generating securities transaction for the corporation, no employer-employee relationship exist as they are paid solely on commission basis. In connection therewith, you now request a ruling as to whether or not the income or commissions received by the aforesaid agents or salesmen of AGJ corporation are subject to withholding tax as commercial brokers under Section 1 (g) of Revenue Regulations No. 6-85. In reply thereto, I have the honor to inform you that the aforementioned agents and/or salesmen are commercial brokers. Accordingly, the money payments to the agents or salesmen of AGJ Securities Corporation in the form of commissions are subject to the 5% expanded withholding tax pursuant to Section 1 (g) of Revenue Regulations No. 6-85 implementing Section 50 (b) of the Tax Code, otherwise known as the Revised and Consolidated Expanded Withholding Tax Regulations. Very truly yours, (SGD.) JOSE U. ONG Commissioner