BIR Ruling [UN-424-95]

December 4, 1995 BIR RULING [UN-424-95] Pelaez Gregorio Sipin Bala and Robles 6/F Padilla Building, Emerald Avenue, Ortigas Center, Pasig Gentlemen : This refers to your letter dated November 17, 1994 stating that Pelaez Gregorio Sipin Bala & Robles is a general professional Partnership existing under and by virtue of Philippine Laws; that it is registered with the Securities and Exchange Commission as such, as of September 1, 1993; and that it is engaged in the general practice of law; that as a general professional partnership engaged in the practice of law, it is not subject to tax, therefore, it is also exempt from creditable withholding tax, but the partners in their individual capacity are the ones taxed on their respective shares from the net income of the partnership. Based on the foregoing representations, you are now requesting for a certificate of exemption from the creditable withholding tax. In reply, please be informed that a general professional partnership within the contemplation of Section 20(b) in relation to Section 24(a), both of the Tax Code, as amended is not subject to income tax and consequently to the creditable expanded withholding tax provisions of Revenue Regulations No. 6-85, as amended, implementing Section 50(b) of the Tax Code, as amended. Such being the case, the fees paid to your partnership for the professional services rendered to its clients are not subject to the creditable expanded withholding tax. (BIR Ruling No. 178-92, dated May 29, 1992) cdtech Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)