Sales Counsellors Soliciting Offers to Purchase Interment Spaces are Considered as Real Estate Brokers

December 8, 1981 BIR RULING NO. 254-81 53-f 000-00 254-81 Eternal Gardens Memorial Park Ground Floor, Dominga Bldg. 162 Legaspi Village Makati, Metro Manila Attention: Mr . Gabriel O . Vida Executive Vice-President and General Manager Gentlemen : This refers to your letter dated June 25, 1980, requesting reconsideration of BIR Ruling No. 041-30 dated May 7, 1980, holding your sales counsellors as real estate brokers and, accordingly, the commissions paid to them as sales counsellors are subject to the 5% withholding tax prescribed by Section 1(i) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79. You contend that your sales counsellors cannot be considered real estate brokers because the mere selling of memorial lots will not make them real estate brokers; and that actually the relationship of the sales counsellors to your company is that of an independent contractor as provided in your contract with them. In reply, I have the honor to inform you that even in your contract with the sales counsellor, the latter is "permitted to solicit offers to purchase interment spaces belonging to and sold by Company." Undoubtedly, this makes the sales counsellor a real estate broker because he "solicits for prospective purchasers, or negotiates the purchase, sale or exchange of real estate or interest therein." [Section 187(s), Tax Code] Consequently, he cannot be considered, for internal revenue purposes, an independent contractor. In view thereof, your request for reconsideration has to be, as it is hereby denied, for lack of legal basis. Very truly yours, RUBEN B. ANCHETA Acting Commissioner