3% Withholding Tax-Payment to Mercury

August 28, 1981 BIR RULING NO. 164-81 53-f 000-00 164-81 Reyes, Morgarte and Associates 22 Tirad Pass S.M.II., Quezon City Attention: Mr . Vicente E . Reyes Gentlemen : This refers to your letter dated February 5, 1981 requesting a ruling whether the gross payments of your client, TRINITY FRANCHISING & MANAGEMENT CORPORATION to the Mercury Group of Companies, Inc. (Mercury, for short) is subject to the expanded withholding tax. In reply, I have the honor to inform you that as represented, Mercury renders service to your client by managing the business of the latter. Accordingly, Mercury is a management and consultancy agency and, therefore, the gross payments made to it by your client are subject to the 3% withholding tax on the 15% of said payments, in accordance with Section 1(3)(2)(1) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, implementing Section 53(f) of the Tax Code, as amended by Presidential Decree No. 1351. cdtech Very truly yours, RUBEN B. ANCHETA Acting Commissioner