Expanded Withholding Tax Rate Applicable to Lease/Rental of Watercooler Drinking Fountain Machine

October 12, 1988 BIR RULING NO. 491-88 50 (b) 119-86 491-88 Gentlemen : This refers to your letter dated August 8, 1988 requesting in effect a ruling as to the expanded withholding tax rate applicable to lease/rental of watercooler drinking fountain machine. It is represented that your division is engaged in the lease of watercooler drinking fountain machine; that the lease is covered by a Contract of Lease Agreement for a term of two (2) years and a fixed monthly rental rate (including tax); and that your customers are misled as to the appropriate expanded withholding tax rate on lease of personal properties. In reply, please be informed that payments only to persons enumerated in Revenue Regulations No. 6-85, implementing Section 50(b) of the Tax Code, as amended, are subject to the expanded withholding tax. Considering that payments for lease of personal property such as watercooler drinking fountain machine under a contract of lease are not among those specified in said Regulations, such payments are not, therefore, subject to the expanded withholding tax. However, since the aforesaid payments are not subject to withholding tax, the payor shall render an information return on such payments pursuant to Section 61 (formerly 71) of the Tax Code, as amended by Batas Pambansa Blg. 133 and as implemented by Section 21 of Revenue Regulations No. 1-82 dated March 18, 1982. Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner