Exemption from 1% Expanded Withholding Tax on Business Activity of Supplying Laundry Services

October 14, 1988 BIR RULING NO. 506-88 50 (b) 000-00 506-88 Gentlemen : This refers to your letter dated June 18, 1988 stating that you are engaged in supplying laundry services to various garments exporters and manufacturers; that laundry and other subcontracting services are not enumerated among those subject to expanded withholding tax; that you are under the impression that no withholding tax should be deducted from your collections; and that most of your clients have been withholding 1% from your collections in accordance with the expanded withholding tax regulations. Based on the foregoing representation, you now request in effect a ruling as to whether or not you are subject to 1% expanded withholding tax on your business activity of supplying laundry services. 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 are subject to the expanded withholding tax prescribed therein. Considering that payments for rendering/supplying laundry services are not among those specified in said Regulations, the payments of your clients for your services are not, therefore, subject to the expanded withholding tax. cdti Very truly yours, (SGD.) EUFRACIO D. SANTOS Deputy Commissioner