Tax Status of Compania General de Tabacos

April 27, 1959 BIR RULING NO. 235-59 5th Indorsement Returned to the Regional Director, Regional District No. 3, B.I.R., Manila, the papers bearing on the case of the Cia General de Tabacos de Filipinas. The question to be resolved in this case is whether or not the Compania General de Tabacos is a commercial broker under its management contract executed on December 28, 1955. Under said contract, the Compania General de Tabacos, as General Managers, would be responsible for the selling of the sugar molasses, and other products of sugar cane and other products manufactured or purchased by the Principal, the Central Azucarera de Bais. All other activities of the Compania General de Tabacos enumerated in the contract are activities tending to or for the purpose of effecting the sale or marketing of the sugar and molasses and other products produced or purchased by the Central Azucarera de Bais. In these activities, the Compania General de Tabacos does not manage the business of its principal for the reason that it does not supervise the production or purchasing of the above-mentioned products which is the business of its principal but only performs activities primarily for the purpose of selling or marketing of said products and receives compensation therefor under the commission basis. It is the opinion of this Office that the Compania General de Tabacos is a commercial broker. (SGD.) JOSE ARAAS Commissioner of Internal Revenue