Withholding Tax — Brokerage Fee

December 21, 1979 BIR RULING NO. 132-79 This refers to your letter dated November 27, 1978 written in behalf of your client, Transworld Brokerage, Inc., requesting a ruling as to whether the income payments received by your client from hauling of cargoes from Manila to any point of Luzon is subject to the withholding provisions of Revenue Regulations No. 13-78, which took effect last November 1, 1978. It is represented that Transworld Brokerage, Inc., is a grantee of certificate of public convenience from the Board of Transportation, authorized to operate a business of freight for hire. In reply thereto, please be informed that payments to customs brokers are among those subject to withholding tax at the rate of 5% pursuant to Section 1(i) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79. Consequently, brokerage and hauling fees received by your client in lump sum shall be payment of brokerage fees is made separately from the hauling fees, only the brokerage fee shall be subject to the said withholding tax. Receipts derived from purely hauling services are not subject to the withholding tax. It is understood, however, that your client has also provided itself with the P100 annual fixed tax as transportation contractor as prescribed by Section 192(1) of the Tax Code, as amended.