BIR Ruling [UN-178-95]

May 3, 1995 BIR RULING [UN-178-95] Concepcion Industries, Inc. 308 Sen. Gil J. Puyat Avenue Ext. Makati, Metro Manila Attention: Mr . Ariel G . Hidalgo Credit & Collection Manager Gentlemen : This refers to your letter dated February 1, 1995, in effect requesting for a ruling as to the basis of the 1% expanded withholding tax prescribed under Section 1(n) of Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94. cdtech It is represented that you are a company engaged in manufacturing and marketing of home appliances and airconditioners; that you deal with several appliance dealers/customers nationwide some of whom belong to the top 5,000 corporations; and that your dealers/customers compute the 1% creditable withholding tax on their income payments on different basis, i.e., (i) based on net of VAT, (ii) based on net of VAT and discounts and (iii) based on gross amount billed; hence, this request for clarification. In reply, please be informed that for purposes of the withholding tax under Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94, the 1% creditable withholding tax is based on the gross selling price of the articles sold, net of VAT. (VAT Ruling No. 175-88) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)