Tax Liability of a Person Engaged in Business as a Contractor

August 3, 1960 BIR RULING NO. 335-60 Mr. Aurelio P. Gutierrez 2355 Juan Luna St. Tondo, Manila S i r : This is with reference to your letter of even date requesting information as to your internal revenue tax liabilities under the following facts: "I am contemplating to open business to be known as the 'SERVICES UNLIMITED' which will operate by offering its services by way of (1) construction, masonry, electrical devices, electronics, tinsmithing, refrigeration and air-conditioning, house-hold appliances, plumbing and other servicing needs of prospective clients." Based on the foregoing facts, please be informed that you may be considered engaged in business as a contractor, subject to an annual fixed tax of P20.00 [Sec. 182(A)(1), NIRC] and to a percentage tax equivalent to 3% of your gross monthly receipts [Sec. 191, NIRC]. The fixed annual tax of P20.00, above-stated, must be paid before engaging in such business [Sec. 178, NIRC], and every calendar year thereafter, payable at your option annually, on or before the 20th day of January, or semi-annually, on or before the 20th day of January and July [Sec. 180, NIRC]. With respect to the percentage tax, you are required to make a true and complete return of your gross monthly receipts and pay the tax (3%) due thereon within twenty days after the end of each month [Sec. 183(a), NIRC]. It is understood, in this connection, that you are further subject to the income tax and to the basic and additional residence taxes. aisadc Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue