Practice of Rendering Psychic Power is Exempt from Contractor's Tax but Subject to Income Tax

December 3, 1981 BIR RULING NO. 242-81 205-00 000-00 242-81 Mr. Virgilio S. Yazon World Teiramic Center Makati, Metro Manila S i r : This refers to your letter dated February 5, 1979 stating that you are a Psychic-practitioner; that your psi-power is not university-acquired but Godgiven; that you intend to teach and give psi-spiritual services for a fee to those who can afford; and for free to those who cannot afford; that psi-services are actually teaching by examples Psychic-spiritual awareness and development, and rendering service to God and man; and that believing you are subject to 3% contractor's tax you paid P100.00 under PTR No. 0266086 and Confirmation Receipt No. A734974 dated January 25, 1979. Based on said representations, you want to know whether your gross income derived from your psychic practice is subject to income and contractor's taxes. In reply thereto, please be informed that your practice of psychic-power is not considered as rendering service as contemplated in Section 205 of the National Internal Revenue Code of 1977 as amended. Hence, you are not subject to the 3% contractor's tax. However, said income derived therefrom is subject to income tax, although it will not be subject to the withholding provisions of Revenue Regulations No. 13-78 implementing Presidential Decree No. 1351. Very truly yours, RUBEN B. ANCHETA Acting Commissioner