Commission Salesman Selling the Products of a Corporation is Not an Employee

October 26, 1960 BIR RULING NO. 473-60 Tidewater Oil Company 520 San Luis Street Ermita, Manila Gentlemen : This is in connection with your query as to whether or not there exists an employer-employee relationship between your company and a commission salesman who sells your products under the following conditions: ". . . The commission salesman, while selling products of the Company, is also free to sell similar competitive products or any other products and/or merchandise. For every sale that he makes, we intend to give him a certain percentage by way of commission. The commission salesman will not, in any manner, be under the supervision or control of the Company in the sense that he will be preparing his own itinerary, go out and sell any time he wants, and does not have to render any report of his activities to the Company. If the commission salesman makes a sale he gets a commission; if he does not sell, he does not receive anything by way of commission from the Company. Out of the commission that he may receive, he defrays all his expenses incurred while selling Company products." In reply, I have the honor to inform you that a commission salesman selling the products of a corporation under the above conditions is not an employee and therefore the corporation is not required to withhold the tax from any commission paid to him. Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue