Tax Liability of the Persons Engaged in Supplying Sewing Services to Various Garment Exporters and Manufacturers

December 19, 1988 BIR RULING NO. 588-88 50 (b) 492-88 588-88 Gentlemen : This refers to your letter dated January 27, 1988 stating that you are engaged in supplying sewing services to various garment exporters and manufacturers; and that most of your clients have been withholding the 1% tax from your collections in accordance with the expanded withholding tax regulations. Based on the foregoing representations, you now request a ruling as to whether or not the 1% expanded withholding tax should be withheld from your said collections. In reply, please be informed that under Revenue Regulations No. 6-85 otherwise known as the Revised and Consolidated Expanded Withholding Tax Regulations implementing Section 50(b) of the Tax Code, as amended, payments only to persons enumerated therein are subject to the expanded withholding tax. Considering that payments for supplying sewing services 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 Section 71) of the Tax Code, as amended by Batas Pambansa Blg. 135 and as implemented by Section 21 of Revenue Regulations No. 872 dated March 18, 1982. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner