Dealership Agreement with the Sun Brothers

June 10, 1958 BIR RULING NO. 295-58 Mr. Roger A. Rotor Certified Public Accountant P. O. Box 11 Bacolod City S i r : Reference is made to your letter dated May 13, 1958, requesting information as to whether or not your wife, under her dealership agreement with the Sun Brothers, may be considered a commercial broker. The terms and conditions of said agreement may be summarized as follows: "The dealer shall deal in, sell or promote the sale and handle the goods of the principal. The dealer is required to file a P10,000.00 bond to guarantee 30-day credit sales, his liability as guarantor under the conditional sales agreement, his cash collections and deliveries to him by the principal. Dealer sells in the name of the principal, if on installment, but in his name, if cash. All collections by dealer are remitted regularly to the principal who upon receipt thereof issues the corresponding receipt which he mails direct to the customer concerned. Dealer, is also required to submit to the principal a monthly stock inventory. For selling the goods of the principal, dealer is paid, in the case of refrigerators for instance, upon consummation of the contract and remittance of the corresponding amount due, P70.00 cash and 10% on all collections thereafter on the balance." In reply thereto, I have the honor to inform you that, under the facts recited above, your wife is clearly a commercial broker. As commercial broker, she is subject to the fixed and percentage taxes prescribed in Sections 182 and 195 of the Tax Code. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue