Tuesday, August 05, 2008 Tax notes: Withholding tax on general consulting business
A corporation of engineers, surveyors and architects of different fields whose primary purpose is to (1) engage in and carry out general consulting business on construction management, general construction, manufacturing and other projects; (2) act as manager or managing agent; and (3) provide management, investment and technical advice for commercial, industrial and other kinds enterprises (except fund management) shall be classified as a specialty contractor. (BIR Ruling No. DA-254-2008, April 18, 2008)
Hence, payments to the said firm shall be subject to the two-percent creditable withholding tax on contractors, and not to the 10-percent or 15-percent withholding tax on professional fees. (Source: Punongbayan & Araullo)
