Payment of Gross Rental Exceeding P500.00 is Subject to 5% Withholding Tax

December 8, 1981 BIR RULING NO. 262-81 53-f 000-00 262-81 Coordinated Trading 43 Times Street West Triangle Home, Quezon City Attention: Mrs . Libbie B . Prudencio President M a d a m : This refers to your letter dated November 4, 1980, requesting confirmation of your opinion that you are not subject to the withholding tax prescribed by Section 53(f) of the Tax Code, as amended by P.D. No. 1351, in connection with your business of renting all kinds of heavy equipment. You have represented that pursuant to a rental contract, you were contracted by Benguet Consolidated, Inc. to provide said company with heavy equipment which it will use in excavation and leveling its project site; that Benguet will pay you a fixed hourly rate for the use of said equipment; that you will provide for the driver-operator, gas and oil and maintenance; and that some of the equipment are owned by you while others are rented from other sources. In reply, please be informed that under the foregoing facts, the gross rental paid to you which exceeds P500.00 per contract or payment, whichever is greater, is subject to the 5% withholding tax in accordance with Section 1(c) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, implementing Section 53(f) of the Tax Code, as amended. aisadc Very truly yours, RUBEN B. ANCHETA Acting Commissioner