Tax Liability of a Contractor under P.I.-U.S. Military Bases Agreement

March 16, 1959 BIR RULING NO. 144-59 Mr. Benedicto Z. Rivera San Fernando, La Union S i r : In reply to your letter dated November 19, 1958, I have the honor to inform you that a person who furnished labor and who, under contracts, undertakes construction works exclusively for the United States Bases is not a business agent but a contractor. The said person is, however, exempt from the 3% contractors and the compensating tax on the materials he may import in connection with his construction works, pursuant to the P.I.-U.S. Military Bases Agreement as supplemented by the exchange of notes between the Philippine and the United States Governments on December 29, 1952; but, he is, nevertheless, subject to the income tax, the basic residence tax and, in proper cases, the additional residence tax. LLphil Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue