Rentals and Maintenance Service Payments on Pager Units are Not Subject to the Creditable Withholding Tax

October 18, 1991 BIR RULING NO. 211-91 50 (b) 000-00 211-91 Gentlemen : This refers to your letter dated May 13, 1991 stating that relative to the provisions of Revenue Regulations No. 6-85 specifically on the 5% creditable withholding tax on rental payments, the SGV is of the opinion that the pager units of Easy Call Int'l. Inc. are not real properties hence, rental and maintenance service payments thereon are not subject to withholding tax. Based on the foregoing representation, you now in effect request a ruling as to whether or not the tax withheld on said rental and maintenance service payments can be refunded. In reply, please be informed that under Section 1 (c) of Revenue Regulations No. 6-85 otherwise known as the Revised & Consolidated Expanded Withholding Tax Regulations implementing Section 50 (b) of the Tax Code, as amended, where the gross rentals paid or payable for the continued use or possession of real property to which the payor or obligor has not taken or is not taking title or in which he has no equity, amounts to at least five hundred pesos (P500.00) such rental shall be subject to 5% creditable withholding tax. It is clear from the above-cited provisions of the Revenue Regulations No. 6-85 that the 5% creditable withholding tax pertains only to rental of real property and does not include rental of personal property as in the case of pager units of Easy Call Int'l. Inc. Such being the case, this Office is of the opinion as it hereby holds that the rentals and maintenance service payments on said pager units of Easy Call Int'l. Inc. are not subject to the creditable withholding tax under Section 1 (c) of Revenue Regulations No. 6-85 and therefore, any amount of tax withheld on such payments is refundable provided that the taxpayer files in writing with the Commissioner of Internal Revenue a claim for credit or refund within two (2) years after the payment of the tax or penalty pursuant to Section 204 of the Tax Code, as amended. aisadc Very truly yours, (SGD.) JOSE U. ONG Commissioner