Bureau of Local Government Finance Opinion

October 8, 2013 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Rina R. Manuel Head, Tax Department Smart Communications, Inc. 6799 Ayala Avenue 1226 Makati City Madam : This refers to your letter dated September 10, 2013 requesting confirmation that Smart Communications, Inc. (SMART) is liable to secure Community Tax Certificate (CTC) and pay the corresponding community tax only where its principal office is located and no longer require to secure CTC and pay the community tax in the LGUs where its branches are located. THIECD It is represented that every year, SMART secures it CTC from Makati City where its head office is located. The corresponding community tax is paid in Makati City. SMART also maintains several branches nationwide. However, for the year 2013 the branch offices of SMART in Tagbilaran City and Iloilo City require SMART to secure CTC within their territorial jurisdiction despite the presentation of the CTC secured in the principal office. In this connection, please be informed that the provision of Article 246 (e) (3) of the Implementing Rules and Regulations (IRR) implementing Section 160 of the LGC regarding the payment of community tax by branches, sales offices or warehouses has already been clarified under Section 2 of Memorandum Circular No. 153 dated June 4, 1992 of the Office of the President which states that, "the community tax shall be paid in the place of residence of the individual, or in the place where the principal office of the juridical entity is located and upon payment thereof, the corresponding community tax certificate shall accordingly be issued." In view thereof, this Bureau has consistently expressed the view that sales offices or branches of corporations and other juridical entities shall not be liable to pay the community tax pertinent to Section 2 of said Memorandum Circular No. 153. Accordingly, this Bureau concurs with your position that SMART should secure and pay the community tax only once to Makati City where its principal office is located and not to LGUs where it only operates/maintains sales office, branch or warehouse. We hope that this will help clarify matters. Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director