Exemption of Stipends from Expanded Withholding Tax

August 17, 1989 BIR RULING NO. 175-89 71 000-00 175-89 Gentlemen : This refers to your letter dated May 11, 1989 requesting a ruling as to whether or not the stipends you pay the Medical Secretaries of your accredited doctors in your accredited hospitals are subject to the expanded withholding tax. It is represented that said Medical Secretaries are employed by the doctors and are not your employees; and that the amount you pay to the said Medical Secretaries represents incentives for extra work rendered to your members seeking services from your accredited doctors. cdt In reply, please be informed that under Revenue Regulations No. 6-85 as amended, otherwise known as the Revised and Consolidated Expanded Withholding Tax Regulations implementing Section 50(b) of the Tax Code, as amended, only payments to persons enumerated therein are subject to the expanded withholding tax. Considering that payments of stipends to Medical Secretaries are not among those specified in said Regulations, such payments are not, therefore, subject to the expanded withholding tax. However, since the aforesaid payments are not subject to the withholding tax, you as the payor shall render an information return on such payments pursuant to Section 61 (formerly Section 71) of the Tax Code, as amended by Batas Pambansa Blg. 135 and as implemented by Section 21 of Revenue Regulations No. 1-82 dated March 18, 1982. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner