Rental Payment Exceeding P500 is Subject to 5% Withholding Tax
BIR Ruling No. 253-81 • Bureau of Internal Revenue (BIR) Issuances • Rulings (Numbered) • Dec 8, 1981
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December 8, 1981 BIR RULING NO. 253-81 53-f 105-79 253-81 Mrs. Amanda D. Gonzales 24-D Aniceto Street Kaingin, Quezon City M a d a m : In reply to your letter dated March 27, 1979, requesting exemption from the 5% withholding tax on the rental payment of a lot co-owned by your father and his nine (9) children, by Royal Undergarment Corporation at P1,000.00 a month, I have the honor to inform you that under Section 1(c) of Revenue Regulations No. 13-76, as amended by Revenue Regulations No. 6-79, the 5% tax is required to be withheld if the gross rental or other payment exceeds P500.00, per contract or payment, which ever is greater. Accordingly, inasmuch as the amount of rental you received from Royal Undergarment Corporation exceeded P500.00, the same is subject to the 5% withholding tax. The fact that each co-owner will receive less than P500.00 when the rental is divided among them will not exempt the whole amount of rental from the withholding tax prescribed by the regulations. cdtech Very truly yours, RUBEN B. ANCHETA Acting Commissioner
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