Customs Broker Who Renders Services for a Fee to Customers Subject to the 10% Value-Added Tax

September 8, 1992 BIR RULING NO. 255-92 102 (a) 000-00 255-92 ESE Brokerage Corporation R416 Condominium Building corner Jaboneros Street Manila Attention: Mr . Dominador S . Engco Gentlemen : This refers to your letter dated March 19, 1992, stating that you are a customs broker who transport goods of customers from the Customs premises to their place of establishment for a compensation; and that you only hire trucks for delivery and do not own trucks or delivery equipment for trucking. Based on the foregoing, you are requesting opinion as to whether you are subject to the value-added tax or to the percentage tax. In reply, please be informed that Section 102(a) of the Tax Code, as amended E.O. No. 273, provides that a value-added tax equivalent to 10% shall be levied, assessed and collected on the gross receipts derived by any person engaged in the sale of services. The phrase "sale of service" means the performance of all kinds of service for others for a fee regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties, including those performed or rendered by customs brokers, among others. Accordingly, you are subject to the 10% value-added tax imposed by said Section 102(a) of the Tax Code, the same to be based on your total gross receipts derived by way of brokerage fees including those received by way of trucking. You are no longer subject to the 3% common carrier's tax imposed by Section 115 of the Tax Code. cdt Very truly yours, JOSE U. ONG Commissioner of Internal Revenue