Tax Liabilities as a Real Estate Dealer, as a Lessor of Personal Property and as an Independent Contractor

August 3, 1987 BIR RULING NO. 227-87 161 (l) 170 (p) 000-00 227-87 Gentlemen : In reply to your letter dated July 9, 1987, I have the honor to inform you as follows: 1. For renting exhibition space similar to renting store spaces without commitment or guarantee on profitability or sales and which space rental may or may not include partitions and enclosures to demarcate boundaries of rented space, you are considered a real estate dealer; hence, subject to the graduated annual fixed tax prescribed under Section 161 (3)(aa) of the Tax Code as amended. 2. For leasing personal properties such as furniture, electric fans and lights, etc., you are considered a lessor of personal property subject to an annual fixed tax of P200.00 and 4% contractor's tax pursuant to Section 161 (l) and 170 (p) of the Tax Code. 3. For entering into service contracts providing personnel, construction, paintings, etc., you are considered an independent contractor. As such, you are subject to another annual fixed tax of P200.00 and 4% contractor's tax pursuant to the aforecited sections of the Tax Code. asiacd 4. You are not subject to the internal revenue tax on business on the registration fees charged to visitors who enter the premises to view the exhibits and be educated and exposed to business opportunities and to conduct business. However, the income derived therefrom is subject to income tax. Regarding the municipal taxes you are liable to pay for the aforementioned businesses, it is suggested that you direct your request to the local government concerned. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner