November 9, 2009

BIR RULING [DA-(C-257) 658-09]

RR 2-98; BIR Ruling No. 128-99 &

003-08, DA-676-99,
DA-512-03, DA-197-04 & DA470-07

Atty. Eden Devela Sarne

Unit 103 Heart Tower Condo
108 Valero Street
Salcedo Village, Makati City

Madam :

This refers to your letter dated March 13, 2009 requesting on behalf of your
client, Philippine Psychiatric Association, Inc. for an opinion or a ruling on the tax
implication of payment of honoraria by your client to lecturers/speakers. aTADcH

As represented, the Philippine Psychiatric Association, Inc., with Taxpayer

Identification No. 211-844-223-000, is a non-stock, non-profit domestic association
of professional Filipino psychiatrists in the Philippines with principal office at Unit
1011, 10th Floor, Medical Plaza Bldg., San Miguel Avenue, Ortigas, Pasig City. It is
registered with the Securities and Exchange Commission (SEC) under SEC
Registration No. 34259 dated September 21, 1973.

Association members are either invited or volunteer to become

lecturers/speakers in scientific meetings held every month and during conventions
held twice a year. Presently, the amount of honoraria paid to lecturers/speakers range
from PhP1,000.00 to PhP5,000.00 within and outside Metro Manila.

In reply, please be informed that where no employer-employee relationship

exists, the company engaged in conducting the lecture/seminar, as withholding agent,
is required to deduct and withhold the creditable tax on income payments to
lecturers/speakers at the rate of 10% pursuant to Section 2.57.2 (A) (8) and (B) of
Revenue Regulations No. 2-98, as amended. The withholding taxes on money/income
payments are required to be paid/remitted on or before the 10th day of the month

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 following the month in which withholding was made.

The amounts subject to withholding tax shall include not only fees, but also per
diems, allowances and any other form of income payments not subject to withholding
tax on compensation.

However, if an employer-employee relationship exists between the company

engaged in conducting the seminar/lecture and the lecturers/speakers, the professional
fees, teaching or lecture fees or honoraria form part of their gross compensation and
subject to income tax on wages under Revenue Regulations No. 2-98, as amended,
and shall be computed pursuant to Section 24 (A) (1) (c) of the Tax Code of 1997, in
accordance with and at the rates established in the following schedule:

Not over P 10,000 5%

Over P10,000 but not over P30,000
Over P30,000 but not over P70,000
Over P70,000 but not over P140,000
Over P140,000 but not over P250,000
Over P250,000 but not over P500,000
Over P500,000
P500 + 10% of the excess over P10,000
P2,500 + 15% of the excess over P30,000
P8,500 + 20% of the excess over P70,000
P22,500 + 25% of the excess over P140,000
P50,000 + 30% of the excess over P250,000
P125,000 + 32% of the excess over P500,000

Please be guided accordingly.

Very truly yours,

Commissioner of Internal Revenue

By:

(SGD.) JAMES H. ROLDAN

Assistant Commissioner
Legal Service
Bureau of Internal Revenue

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