BIR Ruling No. 209-83

November 25, 1983 BIR RULING NO. 209-83 Gentlemen : This refers to your letter dated November 20, 1981 requesting a ruling as to whether the monthly payments of water bills of the Revenue District Office, Revenue Region No. 4-C, San Pablo City to Batangas City Water District is subject to the 5% franchise tax; and a refund of the total amount of taxes withheld. In reply, I have the honor to inform you that under Section 45 of P.D. No. 198 otherwise known as the Provincial Water Utilities Act of 1973 as amended by Presidential Decrees Nos. 768 and 1479, water districts are exempt from paying all national, local and municipal taxes and fees, including income taxes and any franchise, filing, recordation, license or permit fees or taxes, except from the 5% customs duty and 5% internal revenue tax on all importations as provided for under Section 1 of Presidential Decree No. 1352 as amended by Presidential Decree No. 1395. aisadc In view of the foregoing, although under Republic Act No. 1051, Revenue Region No. 4-C, San Pablo City is required to deduct and withhold any tax due on the monthly payments for water bills made by it to Batangas City Water District, nevertheless, since water districts are exempt from tax pursuant to Presidential Decree No. 198 as amended by Presidential Decree Nos. 768 and 1497, the San Pablo Regional Office is not therefore, required to withhold the 5% franchise tax on said payments for water bills. As regards the refund of the taxes withheld, appropriate action is being taken thereon by this Office. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue