BIR Ruling [UN-074-94]

February 28, 1994 BIR RULING [UN-074-94] Joaquin Cunanan & Company 8th Floor, BA-Lepanto Building 8747 Paseo de Roxas Makati, Metro Manila Attention: Mr . George J . Lavadia Senior Tax Manager Gentlemen : This refers to your letter dated February 7, 1994 requesting confirmation of your opinion that payments made by the Philippine Communications Satellite Corporation (PHILCOMSAT) and other similar programholders to your client, the Health Maintenance, Inc. (HMI), for the health care services to be rendered by HMI to the covered employees or persons in accordance with a standard Service Agreement, are not subject to any expanded/creditable withholding tax as provided under Revenue Regulations No. 6-85, otherwise known as the Revised and Consolidated Expanded Withholding Tax Regulations, as amended. It is represented that HMI is a domestic corporation engaged in health care services; and that it has entered into a contract with PHILCOMSAT whereby the former agreed to provide health care services, including medical, surgical and hospitalization services to all PHILCOMSAT employees and their qualified dependents. In reply thereto, please be informed that only payments made to persons enumerated under Revenue Regulations No. 6-85, as amended, are subject to the creditable expanded withholding tax. Considering, therefore, that payments made by PHILCOMSAT and other similar programholders, in favor of your client, HMI, for health care services are not among those specified in the aforesaid Regulations, your opinion that the aforesaid payments to HMI by PHILCOMSAT and other similar programholders are not subject to the creditable expanded withholding tax, is hereby confirmed. (BIR Ruling No. 63-81 dated April 1, 1981). cd Very truly yours, JAIME M. MAZA Assistant Commissioner (Legal Service)