Oral Agreement Entered into By and Between a Company and Rufino Peralta

April 4, 1960 BIR RULING NO. 160-60 Atty. Federico D. Peralta San Manuel, Tarlac S i r : Reference is made to your letter dated March 31, 1960, requesting opinion whether or not the person or persons referred to under the facts stated below, is subject to the fixed and percentage taxes prescribed in Section 182 and 191 of the Tax Code. "By virtue of and pursuant to an oral agreement entered into by and between a Company and Rufino Peralta, he together with seven (7) men, shall undertake the cutting and loading of sugar canes from the cutting area to the central, under the following conditions and terms, to wit: 1. That Rufino Peralta shall receive P2.35 per ton of sugar cane cut and loaded. 2. That of the total amount received, he shall undertake to pay P1.80 per ton to wagon leaders and those directly incharge in the loading and cutting of sugar canes. 3. That he shall undertake to pay such other laborers as are recipients of fixed and definite wages and whose duties are: (a) Placing of the railways in the field for the wagons to pass; (b) Caretaker or camarin, caretakers of work animals maintenance and repairs of roads and small bridges. 4. That he undertakes to recommend to the management such laborers and other salaried employees as are deemed necessary who approves finally the same. 5. That the men shall work under the supervision and control of the management." In reply thereto, I have the honor to inform you that the persons referred to in your letter are mere laborers and not contractors, and therefore, they are not subject to the fixed and percentage taxes prescribed in sections 182 and 191 of the Tax Code. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue