Tax Liability of a "Business Agent"

November 12, 1959 BIR RULING NO. 603-59 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants P. O. Box 589, Manila Gentlemen : Reference is made to your letter of the 6th instant, requesting information whether or not, under the following facts, your client would be considered a business agent within the meaning of section 194(v) of the Tax Code and, in a negative case, whether or not it would be subject to any other internal revenue business tax. "Our client, a newly organized financing corporation, will be buying at a discount from businessmen and other corporations receivable or promissory notes executed in favor of the latter for goods or property purchased from them on installment. It will undertake at its risk the collection of these receivables or the amounts covered by the said promissory notes from the debtors or makers of said notes. Its activities will be confined to the purchase of receivables or promissory notes and the collection thereof. It will not engaged in the resale of the notes so purchased." In answer thereto, I have the honor to inform you that, based on the aforequoted facts, your said client cannot be considered a "business agent" as the term is defined in section 194(v) of the Tax Code. Accordingly, it is not subject to the fixed and percentage taxes imposed upon business agents. Neither is it subject to any other business tax. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue