Taxability of the Purses of the Champion who is a Resident Filipino and of the Challenger and Other Boxing Participants who are Non-resident Aliens

October 9, 1991 BIR RULING NO. 207-91 123 000-00 207-91 Gentlemen : This refers to your letter dated September 23, 1991 stating that you are scheduled to promote the forthcoming World Boxing (WBA) title bout in the bantamweight division between the current champion, Luisito Espinosa (Filipino) and the number one challenger, Israel Contreras of Venezuela. cdta In view thereof, you now request for a ruling that the purses of the champion, the challenger, and the other boxers participating in said promotion be exempted from withholding and/or income taxes in the same manner that the ticket sales for the event are exempted from amusement tax. In reply, please be informed that pursuant to Section 1 of Executive Order No. 225 issued on July 16, 1987 reading "Section 1. Section 228 (now Sec. 123), paragraph (3) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: "3. Ten per centum in the case of boxing exhibitions: Provided, however , that boxing exhibitions wherein World or Oriental Championship in any division is at stake shall be exempt from amusement tax: Provided, further, That at least one of the contenders of the World or Oriental Championship is a citizen of the Philippines, and said exhibitions are promoted by a citizen/s of the Philippines or by a corporation or association at least sixty per cent of the capital of which is owned by such citizens." the gross receipts derived by you in promoting the title fight between the current champion Luisito Espinosa (Filipino) and the number one challenger, Israel Contreras of Venezuela shall be exempt from amusement tax. However, the purses of the challenger, or any of the participants who are considered non-resident aliens not engaged in trade or business in the Philippines (because their stay in the Philippines is for 180 days or less) shall be subject to tax at the rate of 30% pursuant to Section 22 (b) of the Tax Code, as amended by Executive Order No. 37. This is true even if their purses are not paid in the Philippines but elsewhere. On the other hand, the purse of the current champion Luisito Espinosa who is a resident Filipino shall be subject to income tax at the rate prescribed under Section 21 (a) of the same Code. cdtech Very truly yours, (SGD.) JOSE U. ONG Commissioner