Section 26
SEC. 26. Section 205 of the National Internal Revenue Code is hereby renumbered and amended to read as follows: “SEC. 170. Contractors, proprietors or operators of dockyards, and others. – A contractor’s tax of four percent of the gross receipts is hereby imposed on proprietors or operators of the following business establishments and/or persons engaged in the business of selling or rendering the following services for a fee or compensation: “[a] General engineering, general building and specialty contractors, as defined in Republic Act No. 4566; “[b] Filling, demolition and salvage work contractors and operators of mine drilling apparatus; “[c] Dockyards; “[d] Installation of water system, gas or electric light, heat or power; “[e] Smelting plants, engraving plants, plating establishments and plastic lamination establishments; “[f] Upholstering, washing or greasing of motor vehicles, vulcanizing, recapping and battery charging; “[g] Planning or surfacing and recutting of lumber and sawmills under contract to saw or cut logs belonging to others; “[h] Dry cleaning or dyeing establishments, steam laundries and laundries using washing machines; “[i] Repair of any kind of bicycles, mechanical and electrical devices, instruments, apparatus, or furniture and shoe repairing by machine or any mechanical contrivance; “[j] Parking lots and parking spaces; “[k] Tailor shops, dress shops, milliners and hatters, beauty parlors, barber shops, massage clinics, sauna, turkish and swedish baths, slendering and body building saloons and similar establishments, photographic studios and funeral parlors; “[l] Arrastre and stevedoring, warehousing, or forwarding establishments; “[m] Plumbers, smiths and house or sign painters; “[n] Printers, bookbinders, lithographers and publishers, except those engaged in the publication or printing and publication of any newspaper, magazine, review, or bulletin which appear at regular intervals, with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements; “[o] Business agents and private detective or watchman agencies; “ Lessors of personal property, except video, tape cassettes and nonresident owners of property subject to the final tax under Section 24[b] [vii] of this Code; and “[q] Other independent contractors. The term independent contractors includes persons [juridical or natural] not enumerated above [but not including individuals subject to the occupation tax under the Local Tax Code] whose activity consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractors or their employees. It does not include regional or area headquarters established in the Philippines by multinational corporations, including their alien executives, and which headquarters do not earn or derive income from the Philippines and which act as supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Pacific Region. “The term “gross receipts” means all amounts received by the prime or principal contractor as the total contract price, undiminished by any amount paid to the subcontractor under a subcontract arrangement. Any portion of the total contract price which is paid to the subcontractor, shall be excluded from the taxable gross receipts of the subcontractor.”