Tax Liability of Special Watchman Agencies

June 26, 1959 BIR RULING NO. 317-59 Messrs. Eusebio V. Navarro & Associates 313 Samanillo Bldg., Escolta M a n i l a Attention : Mr . Angel Al . Caluntad Gentlemen : In reply to your letter dated June 9, 1959, I have the honor to inform you that this Office had ruled, on several cases, that special watchman agencies, for business tax purposes, are considered as business agents, subject to the annual fixed tax of P75.00 pursuant to section 182(A)(3)(w) and a percentage tax of 3% based on their monthly gross receipts as prescribed in section 191, both provisions of the Tax Code, as amended. On the other hand, even assuming that special watchman agencies are not business agents as contemplated in section 194(v) of the Tax Code, yet, the same agencies would still fall under section 191 of the same Code as "independent contractors, likewise, subject to the percentage tax of 3% on its gross receipts derived from its business for selling their services to the public for commission, fee, compensation, or reward, as the case may be. In view of the foregoing, your request for a ruling that special watchman agencies be excluded and exempt from the operation of section 191 of the Tax Code has to be, as it is hereby, denied. liblex Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue