BIR Ruling No. 339-12

May 15, 2012 BIR RULING NO. 339-12 RMC 3-2012 L.P. Parias & Associates-Architects 65 Scout Delgado cor. Sct. Tobias Sts. Laging Handa, Quezon City 1103 Attention: Ma. Cecilia T. Parias Finance & Admin. Head Gentlemen : This refers to your letters dated February 8, 2012 and March 15, 2012 requesting a clarification on the following matters: 1) L.P. Parias & Associates-Architects is a General Professional Partnership firm. 2) Is our company exempted from income tax and not subject to expanded withholding tax? 3) How do partners of the General Professional Partnership settle their annual income payments? 4) What is the basis for computing the distributive share of the partners? 5) Our client, University of the East-Manila issued payment to our company and subjected a 10% withholding tax for rendering architectural design services for their PSPO building project sometime in December 2011. University of the East-Manila would issue a refund for the 10% tax withheld from our company and subsequent payments will not be subjected to withholding tax, if we submit a certification from BIR confirming the exemption of 10% withholding tax for L.P. PARIAS & ASSOCIATES-ARCHITECTS which is a general professional partnership firm. ESTDcC In reply, please be informed that with the issuance of Revenue Memorandum Circular (RMC) No. 3-2012 [Tax Implications of General Professional Partnership] , the issuance of a BIR ruling is not necessary as the said RMC sufficiently discussed the above-mentioned issues, specifically, the said RMC provides that income payments made to a general professional partnership in consideration for its professional services are not subject to income tax and consequently to withholding tax prescribed in Revenue Regulations No. 2-98, as amended. Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue