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Bir Ruling (Da 533 07)
Bir Ruling (Da 533 07)
Madam:
This refers to your letter dated July 26, 2007 requesting for a ruling on
whether or not Revenue Memorandum Circular (RMC) No. 39-2007, clarifying the
income tax and VAT treatment of agency fees/gross receipts of security agencies
which is comprised of the agency fee and the amount reserved for the salaries of
the security guards, including the withholding taxes due thereon, is applicable to
manpower agencies (janitorial/clerical services). HSTAcI
There is nothing in the context of RMC No. 39-2007 that would manifest or
suggest the intention to have the RMC apply to manpower agencies i.e., janitorial
and clerical services, other than security agencies. In fact, the RMC citing Section
1, Rule XIV of the 1994 Revised Rules and Regulations implementing Republic
Act No. 5487, as amended, governing the "Organization and Operation of Private
Security Agencies and Company Security Forces throughout the Philippines,"
places the primary obligation on the client to pay the salaries of the security guards
and requires that the monies received by the security agency representing salaries
Copyright 2015 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia First Release 2015 1
shall be earmarked and segregated for the said guards, and not form part of the
security agency's gross income and taxable gross receipts when actually or
constructively received. On such basis, the security agency is placed on a tax
situation different from other service providers.
Thus, unless expressly mentioned in the issuance, the RMC cannot apply to
agencies other than security agencies as specifically and expressly provided in its
subject. ESHcTD
Copyright 2015 CD Technologies Asia, Inc. and Accesslaw, Inc. Philippine Taxation Encyclopedia First Release 2015 2