Bureau of Local Government Finance Opinion

June 14, 2001 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Lolita M. Collado Operation Manager Optimum Securities Corporation #11 Corner United & 2nd Street Bo. Kapitolyo Pasig City Madam : This refers to your letter dated May 24, 2001, requesting opinion regarding the payment of business tax of Optimum Securities Corporation (OSC). Representations are made that OSC is a stockbroker of Philippine Stock Exchange (PSE). Its office is located in Pasig City where all documentation for a brokerage firm such as accounting, invoicing/recording, backroom and other day to day operation are performed. Representations are made further that the PSE has two trading floors, one in Makati City and the other one in Pasig City. OSC chooses Makati as its trading floor wherein it receives calls and execute orders from clients from 9:00 A.M. to 12:00 P.M. by the stock traders. OSC claims that since year 2000, they are paying both Makati and Pasig a total of 130% for business tax as follows: TDSICH Year 2000 Pasig Assessment Makati Assessment Broker/Dealer 100% 30% In Securities Year 2001 Broker/Dealer 100% 30% In Securities In the situation laid-out above, and applying the rule on situs, the trading floor located in Makati City may be considered only as a liaison office for monitoring orders placed by clients. Said orders are not yet receipts. What was effected is merely the posting of orders, and, therefore, there is no basis for taxation by the City of Makati. However, OSC may be required to pay the Mayor's permit and other regulatory fees for maintaining said liaison office in Makati City. In view of the above, OSC should pay its business tax in full to the City of Pasig where its stockbrokering transactions are completed. The City Treasurers of Pasig and Makati, in separate letters, of even date are being furnished with a copy hereof, for their information and guidance. Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director <www.blgf.gov.ph/downloads/opinion/localtax/2001/a2001-0513.pdf> last visited January 16, 2014.