Printer of Personalized Napkin and Paper Marker, Considered a Contractor

August 22, 1986 BIR RULING NO. 154-86 170 (n) 129-86 154-86 Gentlemen : This refers to your letters dated April 16, May 13, and June 25, 1986, stating that you are engaged in the business of printing personalized napkin and paper marker; that you purchase large size paper product (tissue by the jumbo rolls) from manufacturers and cut the same into sizes; that these cut paper materials are printed with designs in accordance with your customer's instruction (sample attached); that the said paper products are produced only upon orders made by your customer with exact specification such as logo, color, sizes, and thickness; that in case of rejection due to non-compliance of your customer's instructions, the rejected paper products cannot be sold to the general public nor converted to another product. Based on the foregoing representation, you now request in formation as to whether performing the aforesaid services as per your customer's job order or instruction, you are considered a contractor or manufacturer. In reply, please be informed that for rendering services to your aforementioned customers by printing personalized napkin and paper marker upon their specifications you come within the purview of a contractor subject to the P200.00 annual fixed tax and your gross receipts i.e., the whole amount representing the cost of labor and materials supplied by you and paid by your customers are subject to the 4% contractor's tax imposed by Section 170(n) (formerly Section 205(15) of the Tax Code, as amended by P.D. No. 1994. cdtech Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner