20% Final Tax the on Recipient/s of the Share in the Proceeds of the Beauty/Popularity Contest as Part of the Prizes/Winnings

December 11, 1989 BIR RULING NO. 240-89 21 (a) 21 (c) (1) 501-88 240-89 S i r : This refers to your letter dated October 3, 1989 requesting a ruling as to whether the share of the candidates in the proceeds of a Beauty/Popularity contest where money is the criteria in choosing the winners, and held in connection with any town or barangay fiesta celebration or as a form of fund raising activity, is subject to the 20% final tax. In reply, please be informed that pursuant to Section 21(c)(1) of the National Internal Revenue Code, as amended, a tax at the rate of 20% is imposed upon the amount of prizes (except prizes amounting to P3,000.00 or less which shall be subject to tax under paragraph (a) of the same section) and other winnings (except Philippine Charity Sweepstakes winnings) received by a citizen or resident alien from sources within the Philippines. Accordingly, the recipient/s of the aforesaid share in the proceeds of the Beauty/Popularity contest as part of the prizes/winnings shall be subject to the 20% final tax imposed under said Section 21(c)(1) of the Tax Code, if the same amounts to more than P3,000.00 and to tax imposed under Section 21(a) of the same code, if the amount is P3,000.00 or less. cd Very truly yours, (SGD.) JOSE U. ONG Commissioner