Salaries of Security Guards Form Part of the Taxable Gross Receipts of a Security Agency

December 8, 1981 BIR RULING NO. 257-81 205-16 002-69 257-81 Alan Security & Investigation Agency, Inc. 2160 Beta Building Espaa, Manila Attention: Mr . Teofilo R . Almendras President Gentlemen : In reply to your letter dated February 24, 1981, please be informed that under BIR Ruling No. 69-002 dated February 17, 1969, salaries of security guards form part of the taxable gross receipts of a security agency for purposes of the 3% contractor's tax under Section 205 (formerly Sec. 191) of the Tax Code of 1977, as amended. In effect, the aforesaid ruling which finds support in the case of Resty Arbon Singh vs. Commissioner of Internal Revenue, CTA Case No. 1901 dated December 5, 1970 has revoked BIR Ruling No. 65-103 dated September 14, 1965 and the 1964 ruling cited in your letter. Such being the case, as a security agency, the gross money payments to you which include salaries of the security guards constitute your gross receipts subject to the 3% contractor's tax. Moreover, said payments are subject to the expanded withholding tax of 3% of the 15% thereof, pursuant to Section 1(e)(2)(f) of Revenue Regulations No. 6-79, implementing Section 53(f) of the Tax Code of 1977, as amended by P.D. No. 1351. acd Very truly yours, RUBEN B. ANCHETA Acting Commissioner