Commission Paid to an Employee After Separation from Service

September 1, 1959 BIR RULING NO. 428-59 Bolinao Electronics Corporation P. O. Box 1344 M a n i l a Attention : Mr . Benjamin R . Pambuan ( Asst . General Manager) Gentlemen : Reference is hereby made to your letter dated August 7, 1959, requesting the opinion of this Office as to whether the commission paid to an employee after his separation from the service is subject to withholding tax. In reply thereto, please be informed that under Section 2(a) of Revenue Regulations No. V-8, as amended, remuneration for services, unless specifically excepted by law, constitutes wages, even though at the time it is paid, the legal relationship between the employer and the employee ceased to exist. Therefore, being in the nature of wages, such remuneration is subject to withholding tax under Supplement A to Title II of the Tax Code. casia Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue