Income Payments Due to a Corporation for Soliciting Advertisements for Telephone Directories are Not Subject to Withholding Tax

December 8, 1981 BIR RULING NO. 256-81 090 121-81 256-81 Genteldir Employees Association Majalco Bldg., Benavidez cor. Trasiera Legaspi Village, Makati Attention: Mr . Jorge C . Durias President Gentlemen : This refers to your letter dated September 21, 1981, requesting opinion regarding the application of the withholding tax scheme on sales commissions from solicitations of advertisements for telephone directories. You have represented that you are employed by the General Telephone Directory Company to solicit advertisements for PLDT Telephone Directories and that your commissions, which vary from month to month, are based mainly on the amount of advertisements sold; and that although the Expanded Withholding Tax Regulations do not expressly mention or include advertising solicitors, you believe you should be covered by the same. In reply thereto, I have the honor to inform you that under Rev. Regs. No. 13-78, as amended by Rev. Regs. No. 6-79, otherwise known as the Expanded Withholding Tax Regulations, only payments to persons enumerated therein are subject to withholding tax. Consequently, since income payments due to you for soliciting advertisements for telephone directories are not among those specified therein, you are not subject to the withholding tax, although your publisher who is engaged principally in the publication of advertisements in telephone directories is subject to the 3% of 15% expanded withholding tax based on the gross payments made to them in accordance with Section 1(3)(2)(d) of the aforementioned Regulations. (BIR Ruling No. 029-79 dated May 31, 1979). cdti However, for being employed by the General Telephone Directory Company, the commissions you received shall be considered part of your remunerations for services rendered subject to the ordinary withholding tax on wages prescribed in Chapter XI, Title II of the Tax Code and Revenue Regulations No. V-8 as amended (Section 90 of the Tax Code). Very truly yours, RUBEN B. ANCHETA Acting Commissioner