Internal-revenue Case of the Philprom, Incorporated

March 13, 1959 BIR RULING NO. 148-59 The Regional Director Regional District No. 3 Manila S i r : There is returned to you the internal-revenue case of the Philprom, Incorporated, involving a total deficiency tax of P134,972.98, for reinvestigation and reassessment, in the light of the ruling stated below: cdti From the records, it is clear, that Philprom, Inc., acts merely as an advertising and collection agency for the media. It should be noted, that the money received from their clients are in fact payment by the latter to the media. Said payment is coursed thru Philprom, Inc., only for convenience and to facilitate the collection of their 17.65% commission. Payments, therefore, received by Philprom, Inc., from their clients, for and in behalf of the media, should be excluded in the computation of the 3% contractor's tax. Only the 17.65% commission which Philprom, Inc. receives is subject to tax. The above ruling pertains only to advertising thru media, and should not be understood to include other receipts of Philprom, Inc., on other services, such as, art work, retainer's fee, fees for special publicity service, photo and extraordinary transportation, overtime and representation expenses, and similar others, which are undertaken for its own account expended. cdta Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue