Tax Imposed on the Local Expenses of Collins Radio Company

July 31, 1958 BIR RULING NO. 421-58 3rd Indorsement Respectfully returned to the Administrator, Civil Aeronautics Administration, Pasay City. llcd Opinion has been requested as to whether or not amounts to be paid by his office for local expenses, hotel accommodations, subsistence and transportation of the factory engineer of Collins Radio Company who will come to the Philippines to supervise the installation of eight (8) Collins Vor systems purchased by his Office from said company and to train the personnel of his Office in the operation and maintenance of said systems are subject to Philippine Income Tax. The items of expenses to be defrayed by his office during the stay in this country of the engineer mentioned above is income to said engineer pursuant to Section 29(a) of National Internal Revenue Code, as amplified by Section 66(c) of the Income Tax Regulations. However, the aforesaid amounts maybe claimed as business expense deduction under Section 30(a) of the said Code. It may be stated in this connection that the salary of the said engineer corresponding to his stay in the Philippines is subject to Philippine income tax even if paid to him in his home country, pursuant to Section 37(a)(3) of the Tax Code. cdtech (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue