Tax Liabilities of Sugarcane Planters and Party Liable as Withholding Agent

December 16, 1981 BIR RULING NO. 270-81 53-f 000-00 270-81 Mr. Rodolfo M. Litonjua P.O. Box 227 Bacolod City S i r : In reply to your letter dated April 28, 1980, I have the honor to inform you as follows: 1. Sugarcane planters as producers of agricultural products are subject to the fixed and percentage taxes imposed by Sections 192(1) and 198 of the Tax Code, except marginal farmers whose sales, barters or exchanges of agricultural products do not exceed P20,000 a year. 2. As regards the party liable as withholding agent under Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, it appears that the rentals are payable in piculs of sugar and the money value thereof is determined only after the sugar is milled, the quedan issued and the liquidation statements prepared by the sugar central; that the quedans and liquidation statements are then forwarded to National Sugar Trading Corporation (NASUTRA), the government single sugar buying agency which issues its check in favor of the Central/Planters Association/ Cooperative which in turn makes the necessary distribution and payment to the individual planters/lessors and/or to the financial institution. For purposes of the expanded withholding tax regulations, the party liable as withholding agent is the one making payment of the income to the party which is the recipient of such income so that the tax withheld can be credited against the income tax due from said recipient. From the foregoing facts, the Central/Planters Association/ Cooperative is the party making payment of the rental to the owner/lessor of the sugar land who is, therefore, the one liable as withholding agent. cdtech Very truly yours, RUBEN B. ANCHETA Acting Commissioner