Tax Imposed on a Commercial Broker and at the Same Time a travel Agent

November 16, 1960 BIR RULING NO. 489-60 The World Wide Travel Service Manila Hotel, Manila Gentlemen : Reference is made to your letter of the 4th instant, stating that you are a commercial broker and at the same time a travel agent. You are also stated that on the passage fare you are seeking to collect from the University of the Philippines, the accountant of the latter is deducting and withholding some tax in accordance with the withholding provisions of Republic Act No. 1051, as implemented by Revenue Regulations No. V-40. For that reason, you now request information whether or not as such commercial broker and travel agent, you are subject to said withholding provisions. In answer thereto, I have the honor to inform you that as commercial broker, you are not subject to the withholding provisions in question. Neither are you as business agent (travel agent) subject thereto on the aforesaid passage fare, there being no tax due from you on account of the payment to be made to you of such passage fare. Nevertheless, considering that a common carrier is subject to the withholding provisions on the amount of passage fare due and payable to it by a government agency, such as the University of the Philippines, in your particular case and the university should, before paying the passage fare, deduct and withhold therefrom an amount equivalent to 2% thereof corresponding to the 2% common carrier's tax, even though payment is made not to common carrier concerned but to you as representative thereof. Of course, where it can be shown that the common carrier had already paid said tax, there would be no more need of making the deduction. cdll Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue