Tax Liability of San Martin Investment Corporation

March 22, 1960 BIR RULING NO. 133-60 San Martin Investment Corporation Room 208 Samanillo Building M a n i l a Gentlemen : This is in answer to your letter of March 7, 1960 inquiring about the liability of your corporation to the business taxes. You stated that some of the purposes for which your corporation was organized are: cdll "To acquire by purchase or lease, or otherwise, lands and interests in lands and to own, hold improve, develop and manage any real estate so acquired and to erect or cause to be erected on any lands owned, held or occupied by the corporation, buildings or other structures with their appurtenances, and to rebuild, enlarge, alter or improve any buildings or other structures now or hereafter erected on any lands so owned, held or occupied, and to mortgage, sell, lease or otherwise dispose of any lands or interests in lands and in buildings or other structure, and any stores, shops, suites, rooms or parts of any buildings or other structures at any time owned or held by the corporation. "To purchase or otherwise acquire, hold for investments sell, assign, transfer, mortgage, pledge, exchange, or otherwise dispose of the whole or any part of the shares of the capital stock, bonds, coupons, mortgages, deeds of trust, debentures, securities, obligations and other evidences of indebtedness of any corporation, now or hereafter existing;" Under the above circumstances, your corporation is, for purposes of the fixed tax, a real estate dealer and a dealer in securities. As such it shall be subject to the fixed tax imposed by section 182(A-3-s) of the Tax Code on each of its businesses. The fixed (or privilege) tax should be paid before any business can be lawfully begun. (Secs. 178 & 180, Tax Code). You stated that the certificate of registration of your corporation has been issued and that you now seek to present to this Office the books of accounts of the corporation for approval and registration. All these, we believe, indicate that your corporation is already open and ready for business. Hence, this Office believes, and so holds, that your corporation should pay the fixed taxes before registering its books of accounts although it does not yet own income-producing properties nor has it made any sale of stock. In this connection, however, please be advised further that if after investigation the business or businesses of your corporation are not as those stated in your letter, this Office may modify or alter this ruling accordingly. prcd Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue