SUBJECT : Suspension of the Implementation of Revenue Regulations No. 6-2007
TO : All Internal Revenue Officers and Others Concerned
________________________________________________________________________
BACKGROUND:
The regulations and issuances on the collection of advance VAT on the sale of refined sugar have been consolidated under Revenue Regulations No. 6-2007. These regulations provide for a) updated policies and procedures for the payment of the advance VAT on the sale of refined sugar, including those made by a duly accredited and registered cooperative in good standing, b) classification of sugar and sugar products, c) the monitoring system for the processing of raw sugar into refined sugar intended for the world market and d) the tax treatment of raw sugar processed into refined sugar intended for the world market or the sugar classified as “E” sugar or “A” sugar.
The sugar industry, particularly the planters, sent numerous requests to the Department of Finance (DOF) asking for the immediate suspension of the said regulations, stating that the crop year is already approaching and that, to them, some provisions are still not so clear or not well-explained and thereby causing fear of possible non-compliance. The purpose of the suspension is to give time to both the Bureau of Internal Revenue (BIR) and the sugar industry to thresh out unclear provisions in RR 6-2007, and to introduce improved version of the Regulations to properly address the problems of the sugar industry and collect the correct taxes due from them. Section 1. Suspension. Pursuant to the provisions of Section 244 of the National Internal Revenue Code (NIRC) of 1997, these Regulations are hereby promulgated to suspend, until further notice, the implementation of Revenue Regulations No. 6-2007, entitled “Consolid ated Regulations on Advance Value Added Tax on the Sale of Refined Sugar, Amending and/or Revoking All Revenue Issuances Issued to this Effect, and for Other Related Purposes”.
Section 2. Effectivity. These Regulations shall take effect after fifteen days following publication in any newspaper of general publication.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
RECOMMENDING APPROVAL:
(Original Signed)
LILIAN B. HEFTI
OIC- Commissioner of Internal Revenue
REVENUE MEMORANDUM CIRCULAR NO. 55-2007
SUBJECT: Publishing the Full Text of Department Order No. 29-07 Dated August 15, 2007, “Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9480,” Otherwise Known as “Tax Amnesty Act of 2007”
TO : All Internal Revenue Officials, Employees and Others Concerned
For the information and guidance of all internal revenue officers, employees and others concerned, quoted hereunder is the full text of Department Order No. 29-07 dated August 15, 2007 issued by the Secretary of Finance to implement the provision of Republic Act No. 9480, “An Act Enhancing Revenue Administration and Collection By Granting An Amnesty On all Unpaid Internal Revenue Taxes Imposed by the National Government For Taxable Year 2005 and Prior Years”
“DEPARTMENT ORDER NO. 29-07
August 15, 2007
RULES AND REGULATIONS TO IMPLEMENT REPUBLIC ACT NO. 9480
Pursuant to Section 15 of Republic Act No. 9480, “An Act Enhancing Revenue Administration and Collection By Granting An Amnesty On all Unpaid Internal Revenue Taxes Imposed by the National Government For Taxable Year 2005 and Prior Years,” the following rules and regulations are hereby promulgated to implement the provisions of said Act.
RULE I
TITLE, PURPOSE AND CONSTRUCTION
SECTION 1. Title and Purpose. – These rules and regulations, to be known and cited as the “Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9480,”otherwise known as “Tax Amnesty Act of 2007,” are hereby promulgated to govern the availment by qualified persons and/or entities of the tax amnesty granted under RA 9480, covering all unpaid internal revenue taxes for the taxable year 2005 and prior years.
SEC. 2. Construction. – These Rules shall be construed and applied in accordance with and in furtherance of the policies and objectives of RA 9480. In case of conflict or ambiguity, which may arise in the implementation of these Rules, the Department of Finance (DOF), in coordination with the Bureau of Internal Revenue (BIR), shall issue the necessary clarification.
RULE II
COVERAGE
SEC. 3. Taxes Covered. – The tax amnesty shall cover all national internal revenue taxes imposed by the National Government for the taxable year 2005 and prior years, with or without assessments duly issued therefor, that have remained unpaid as of December 31, 2005.
SEC. 4. Who May Avail of Tax Amnesty. – The following may avail of the tax amnesty under RA 9480:
1. Individuals, whether resident or nonresident citizens, or resident or nonresident aliens;
2. Estates and trusts;
3. Corporations;
4. Cooperatives and tax exempt entities that have become taxable as of December 31, 2005; and
5. Other juridical entities including partnerships.
For this purpose, an individual taxpayer in his/her own capacity shall be treated as a different taxpayer when he acts as administrator/executor of the estate of a deceased taxpayer. The pertinent provisions of Sec. 236 of the Tax Code on the registration of the estate of the decedent by the administrator or executor and the issuance of new TIN shall be complied with. Therefore, an individual taxpayer, seeking to avail of the tax amnesty and who at the same time is an executor or administrator of the estate of a deceased taxpayer who would also like to avail of the tax amnesty, shall file two (2) separate amnesty tax returns, one for himself as a taxpayer and the other in his capacity as executor or administrator of the estate of the decedent with respect to the revenue and other income earned or received by the estate.
SEC. 5. Exceptions. – The tax amnesty shall not extend to the following persons or cases existing as of the effectivity of RA 9480:
1. Withholding agents with respect to their withholding tax liabilities;
2. Those with pending cases falling under the jurisdiction of the Presidential Commission on Good Government;
3. Those with pending cases involving unexplained or unlawfully acquired wealth, revenue or income under the Anti-Graft and Corrupt Practices Act;
4. Those with pending cases filed in court involving violation of the Anti-Money Laundering Law;
5. Those with pending criminal cases filed in court or in the Department of Justice for tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended.
6. Those with pending criminal cases filed in court for felonies of frauds, illegal exactions and transactions, and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code; and
7. Tax cases subject of final and executory judgment by the courts.
RULE III
AVAILMENT AND PAYMENT OF AMNESTY
SEC. 6. Method of Availment of Tax Amnesty. –
1. Forms/Documents to be filed. – To avail of the general tax amnesty, concerned taxpayers shall file the following documents/requirements:
a. Notice of Availment in such form as may be prescribed by the BIR.
b. Statements of Assets, Liabilities and Networth
(SALN) as of December 31, 2005 in such form, as may be prescribed by the BIR.
c. Tax Amnesty Return in such form as may be prescribed by the BIR.
2. Place of Filing of Amnesty Tax Return. – The Tax Amnesty Return, together with the other documents stated in Sec. 6 (1) hereof, shall be filed as follows:
a. Residents shall file with the Revenue District Officer (RDO)/Large Taxpayer District Office of the BIR which has jurisdiction over the legal residence or principal place of business of the taxpayer, as the case may be.
b. Non-residents shall file with the office of the Commissioner of the BIR, or with any RDO.
c. At the option of the taxpayer, the RDO may assist the taxpayer in accomplishing the forms and computing the taxable base and the amnesty tax payable, but may not look into, question or examine the veracity of the entries contained in the Tax Amnesty Return, Statement of Assets, Liabilities and Networth, or such other documents submitted by the taxpayer.
3. Payment of Amnesty Tax and Full Compliance. – Upon filing of the Tax Amnesty Return in accordance with Sec. 6(2) hereof, the taxpayer shall pay the amnesty tax to the authorized agent bank or in the absence thereof, the Collection Agent or duly authorized Treasurer of the city or municipality in which such person has his legal residence or principal place of business.
The RDO shall issue sufficient Acceptance of Payment Forms, as may be prescribed by the BIR for the use of – or to be accomplished by – the bank, the collection agent or the Treasurer, showing the acceptance of the amnesty tax payment. In case of the authorized agent bank, the branch manager or the assistant branch manager shall sign the acceptance of payment form.
The Acceptance of Payment Form, the Notice of Availment, the SALN, and the Tax Amnesty Return shall be submitted to the RDO, which shall be received only after complete payment. The completion of these requirements shall be deemed full compliance with the provisions of RA 9480.
4. Time for Filing and Payment of Amnesty Tax. – The filing of the Tax Amnesty Return, together with the SALN, and the payment of the amnesty tax shall be made within six (6) months from the effectivity of these Rules.
SEC. 7. Tax Amnesty Rates. – In order to enjoy the benefits of the tax amnesty program, the qualified taxpayers are required to pay an amnesty tax equivalent to five percent (5%) of their total declared networth as of December 31, 2005, as declared in the SALN as of the said period, or resulting increase in networth by amending such previously filed statements for purposes of this tax amnesty, thereby including still undeclared assets and/or liabilities, as the case may be, as of December 31, 2005, or the absolute minimum amnesty payment, whichever is higher, in accordance with the following schedule:
1. Individuals (whether resident or nonresident citizens, including resident or nonresident aliens), Estates and Trusts - 5% or P50,000, whichever is higher
2. Corporations
(a) With subscribed capital of above P50 Million - 5% or P500,000, whichever is higher
(b) With subscribed capital of above P20 Million up to P50 Million - 5% or P250,000,whichever is higher
(c) With subscribed capital of P5 Million to P20 Million - 5% or P100,000, whichever is higher
(d) With subscribed capital of below P5 Million - 5% or P25,000, whichever is higher
3. Other juridical entities, including partnerships, but not limited to, cooperatives and foundations, that have become taxable as of December 31, 2005 - 5% or P50,000, whichever is higher
4. Taxpayers who filed their balance sheet/SALN, together with their income tax returns
for 2005, and who desire to avail of the tax amnesty under this Act by amending such previously filed statements thereby including still undeclared assets and/or liabilities - 5% based on the resulting increase in networth or the minimum absolute amounts of amnesty tax prescribed above, whichever is higher
RULE IV
STATEMENT OF ASSETS, LIABILITIES AND NETWORTH
SEC. 8. Contents of the SALN. – The SALN shall contain a true and complete declaration of assets liabilities and networth of the taxpayer as of December 31, 2005 as follows:
1. Assets within or without the Philippines, whether real or personal, tangible or intangible, whether or not used in trade or business:
a. Real properties shall be accompanied by a description of their classification, exact location, and valued at acquisition cost, if acquired by purchase, or the zonal valuation or fair market value, whichever is higher, if acquired through inheritance or donation;
b. Personal properties other than money, shall be accompanied by a specific description of the kind and number of assets (i.e. automobiles, shares of stock, etc.) or other investments, indicating the acquisition cost less depreciation or amortization, in proper cases, if acquired by purchase, or the fair market price or value at the time of receipt, if acquired through inheritance or donation;
c. Assets denominated in foreign currency shall be converted into the corresponding Philippine currency equivalent, at the rate of exchange prevailing as of December 31, 2005; and
d. Cash on hand and in bank in peso as of December 31, 2005, as well as Cash on Hand and in Bank in foreign currency, converted to peso as of December 31, 2005.
2. All existing liabilities which are legitimate and enforceable, secured or unsecured, whether or not incurred in trade or business, disclosing or indicating clearly the name and address of the creditor and the amount of the corresponding liability.
3. The total networth of the taxpayer, which shall be the difference between the total assets and total liabilities.
SEC. 9. Presumption of Correctness of the SALN. – The corresponding SALN as of December 31, 2005 filed by a taxpayer desiring to avail of the tax amnesty shall be presumed true and correct, except in the following cases:
1. Where the amount of the declared networth is understated to the extent of thirty percent (30%) or more as may be established in proceedings initiated within one (1)- year following the date of filing of the Tax Amnesty Return and the SALN, by, or at the instance of parties other than the BIR or its agents, as when any person, entity or government agency informs the BIR, with sufficient evidence, that the amount of the declared networth is understated to the extent of thirty percent (30%) or more.
2. When findings of or admission in congressional hearings or proceedings in administrative agencies of the government, and in courts, prove that there is at least thirty percent (30%) underdeclaration.
RULE V
IMMUNITIES AND PRIVILEGES
SEC. 10. Immunities and Privileges. – Taxpayers who have fully complied with the conditions under RA 9480 and these rules shall be entitled to the following immunities and privileges:
1. The taxpayer shall be immune from the payment of taxes, as well as additions thereto, and the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to pay any and all internal revenue taxes for taxable year 2005 and prior years.
2. The taxpayer’s Tax Amnesty Return and the SALN as of December 31, 2005 shall not be admissible as evidence in all proceedings that pertain to taxable year 2005 and prior years, insofar as such proceedings relate to internal revenue taxes, before judicial, quasi-judicial or administrative bodies in which he is a defendant or respondent and, except for the purpose of ascertaining the networth beginning January 1, 2006, the same shall not be examined, inquired or looked into by any person or government office. However, the taxpayer may use this as a defense, whenever appropriate, in cases brought against him.
3. The books of accounts and other records of the taxpayer for the years covered by the tax amnesty availed of shall not be examined by the BIR. However, the Commissioner of Internal Revenue may authorize in writing the examination of the said books of accounts and other records to verify the validity or correctness of a claim for any tax refund, tax credit (other than refund or credit of taxes withheld on wages), tax incentives, and/or exemptions under existing laws.
The above-stated immunities and privileges shall not apply where the person failed to file a SALN and the Tax Amnesty Return, or where the amount of networth as of December 31, 2005 is proven to be understated to the extent of thirty percent (30%) or more, in accordance with the provisions of Section 4 of RA 9480 and Section 9, Rule IV hereof.
RULE VI
OFFENSES AND PENALTIES
SEC. 11 . Penalties. – For violations of RA 9480, the following rules on sanctions and penalties shall apply:
1. Any person who, having filed a Tax Amnesty Return or SALN under this Act, willfully understates his networth to the extent of thirty percent (30%) or more shall, upon conviction, be subject to the penalties of perjury under the Revised Penal Code.
2. The willful failure to declare any property in the SALN and/or in the Tax Amnesty Return shall be deemed a prima facie evidence of fraud and shall constitute a ground upon which attachment of such property may be issued in favor of the BIR to answer for the satisfaction of any judgment that may be acquired against the declarant.
3. In addition to the penalties provided in paragraphs (1) and (2) above, immediate tax fraud investigation shall be conducted to collect all taxes due, including increments, and to criminally prosecute those found to have willfully evaded lawful taxes due.
4. In the case of associations, partnerships, or corporations, the penalty shall be imposed on the partner, president, general manager, branch manager, treasurer, officer- in-charge and employees responsible for the violation.
5. If the offender is an officer or employee of the BIR or any government entity, he/she sha ll likewise suffer an additional penalty of perpetual disqualification to hold public office, to vote and to participate in any public election.
SEC. 12. Unlawful Divulgence. – Any person who makes an unlawful divulgence of the Tax Amnesty Return or the SALN shall be penalized by a fine of not less than Fifty Thousand Pesos (P50,000.00) and imprisonment of not less than six years but not more than ten (10) years. However, the Commissioner of Internal Revenue may disclose the content of the Tax Amnesty Return and the SALN upon request of the Congress and in aid of legislation pursuant to and strictly in accordance with Section 20 (A) or Section 290 of the Tax Code.
RULE VII
FINAL PROVISIONS
SEC. 13. Information Management Program. – For purposes of enhancing revenue administration, revenue collection and policy formulation, the DOF in coordination with the BIR, Land Registration Authority, Department of Trade and Industry, Securities and Exchange Commission, Land Transportation Office, and other concerned agencies shall institute an Information Management Program (IMP) for the effective use of information declared or obtainable from the Tax Amnesty Returns and the SALNs required to the filed under RA 9480 and these Rules. To ensure the efficiency and accuracy of the IMP, all the abovenamed agencies shall share and submit all the necessary data and information that shall be requested by the DOF for the purpose, as soon as they are available.
The amount equivalent to Four Hundred Million Pesos (P400,000,000.00) from the collections of the tax amnesty program shall accrue to the DOF and shall be used exclusively for purposes of instituting a Management Information System as mandated under Section 12 of RA 9480.
SEC. 14. Publication of List of Taxpayers and Filers. – As provided under Section 14 of RA 9480, the provisions of Sections 71 and 270 of the Tax Code and Section 26 of Republic Act No. 6388 to the contrary notwithstanding, the Commissioner of Internal Revenue shall, on or before May 31 following close of each calendar year, prepare a list containing the names of all taxpayers, their gross income and amount of income taxes paid for the immediately preceding taxable year, and allow the publication of the same in at least two newspapers of general circulation or the Bureau of Internal Revenue website.
SEC. 15. Moratorium on the Grant of Tax Amnesty. – In order to encourage and improve tax compliance by taxpayers, it is hereby declared as a matter of policy that the grant of tax amnesty, in whatever manner and form, shall not henceforth be allowed, provided that this moratorium shall likewise apply to any administrative tax amnesty by the BIR. It is understood, however, that any compromise or abatement under Sec. 204 of the National Internal Revenue Code of 1997, as amended, shall not be construed as an administrative amnesty.
SEC. 16. Separability Clause. – If for any reason, any section or provision of these Rules be declared unconstitutional or invalid, such parts not affected shall remain in full force and effect.
SEC. 17. Repealing Clause. – All orders, circulars, memoranda, and other issuances, or parts thereof, which are inconsistent with these Rules, are hereby repealed or modified accordingly.
SEC. 18. Effectivity. – These Rules shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation.
DONE in the city of Manila, Philippines, this 15th day of August 2007.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance”
All internal revenue officials and others concerned are hereby enjoined to be guided accordingly and to give this Circular as wide a publicity as possible.
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
TO : All Internal Revenue Officials, Employees and Others Concerned
For the information and guidance of all internal revenue officers, employees and others concerned, quoted hereunder is the full text of Department Order No. 29-07 dated August 15, 2007 issued by the Secretary of Finance to implement the provision of Republic Act No. 9480, “An Act Enhancing Revenue Administration and Collection By Granting An Amnesty On all Unpaid Internal Revenue Taxes Imposed by the National Government For Taxable Year 2005 and Prior Years”
“DEPARTMENT ORDER NO. 29-07
August 15, 2007
RULES AND REGULATIONS TO IMPLEMENT REPUBLIC ACT NO. 9480
Pursuant to Section 15 of Republic Act No. 9480, “An Act Enhancing Revenue Administration and Collection By Granting An Amnesty On all Unpaid Internal Revenue Taxes Imposed by the National Government For Taxable Year 2005 and Prior Years,” the following rules and regulations are hereby promulgated to implement the provisions of said Act.
RULE I
TITLE, PURPOSE AND CONSTRUCTION
SECTION 1. Title and Purpose. – These rules and regulations, to be known and cited as the “Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9480,”otherwise known as “Tax Amnesty Act of 2007,” are hereby promulgated to govern the availment by qualified persons and/or entities of the tax amnesty granted under RA 9480, covering all unpaid internal revenue taxes for the taxable year 2005 and prior years.
SEC. 2. Construction. – These Rules shall be construed and applied in accordance with and in furtherance of the policies and objectives of RA 9480. In case of conflict or ambiguity, which may arise in the implementation of these Rules, the Department of Finance (DOF), in coordination with the Bureau of Internal Revenue (BIR), shall issue the necessary clarification.
RULE II
COVERAGE
SEC. 3. Taxes Covered. – The tax amnesty shall cover all national internal revenue taxes imposed by the National Government for the taxable year 2005 and prior years, with or without assessments duly issued therefor, that have remained unpaid as of December 31, 2005.
SEC. 4. Who May Avail of Tax Amnesty. – The following may avail of the tax amnesty under RA 9480:
1. Individuals, whether resident or nonresident citizens, or resident or nonresident aliens;
2. Estates and trusts;
3. Corporations;
4. Cooperatives and tax exempt entities that have become taxable as of December 31, 2005; and
5. Other juridical entities including partnerships.
For this purpose, an individual taxpayer in his/her own capacity shall be treated as a different taxpayer when he acts as administrator/executor of the estate of a deceased taxpayer. The pertinent provisions of Sec. 236 of the Tax Code on the registration of the estate of the decedent by the administrator or executor and the issuance of new TIN shall be complied with. Therefore, an individual taxpayer, seeking to avail of the tax amnesty and who at the same time is an executor or administrator of the estate of a deceased taxpayer who would also like to avail of the tax amnesty, shall file two (2) separate amnesty tax returns, one for himself as a taxpayer and the other in his capacity as executor or administrator of the estate of the decedent with respect to the revenue and other income earned or received by the estate.
SEC. 5. Exceptions. – The tax amnesty shall not extend to the following persons or cases existing as of the effectivity of RA 9480:
1. Withholding agents with respect to their withholding tax liabilities;
2. Those with pending cases falling under the jurisdiction of the Presidential Commission on Good Government;
3. Those with pending cases involving unexplained or unlawfully acquired wealth, revenue or income under the Anti-Graft and Corrupt Practices Act;
4. Those with pending cases filed in court involving violation of the Anti-Money Laundering Law;
5. Those with pending criminal cases filed in court or in the Department of Justice for tax evasion and other criminal offenses under Chapter II of Title X of the National Internal Revenue Code of 1997, as amended.
6. Those with pending criminal cases filed in court for felonies of frauds, illegal exactions and transactions, and malversation of public funds and property under Chapters III and IV of Title VII of the Revised Penal Code; and
7. Tax cases subject of final and executory judgment by the courts.
RULE III
AVAILMENT AND PAYMENT OF AMNESTY
SEC. 6. Method of Availment of Tax Amnesty. –
1. Forms/Documents to be filed. – To avail of the general tax amnesty, concerned taxpayers shall file the following documents/requirements:
a. Notice of Availment in such form as may be prescribed by the BIR.
b. Statements of Assets, Liabilities and Networth
(SALN) as of December 31, 2005 in such form, as may be prescribed by the BIR.
c. Tax Amnesty Return in such form as may be prescribed by the BIR.
2. Place of Filing of Amnesty Tax Return. – The Tax Amnesty Return, together with the other documents stated in Sec. 6 (1) hereof, shall be filed as follows:
a. Residents shall file with the Revenue District Officer (RDO)/Large Taxpayer District Office of the BIR which has jurisdiction over the legal residence or principal place of business of the taxpayer, as the case may be.
b. Non-residents shall file with the office of the Commissioner of the BIR, or with any RDO.
c. At the option of the taxpayer, the RDO may assist the taxpayer in accomplishing the forms and computing the taxable base and the amnesty tax payable, but may not look into, question or examine the veracity of the entries contained in the Tax Amnesty Return, Statement of Assets, Liabilities and Networth, or such other documents submitted by the taxpayer.
3. Payment of Amnesty Tax and Full Compliance. – Upon filing of the Tax Amnesty Return in accordance with Sec. 6(2) hereof, the taxpayer shall pay the amnesty tax to the authorized agent bank or in the absence thereof, the Collection Agent or duly authorized Treasurer of the city or municipality in which such person has his legal residence or principal place of business.
The RDO shall issue sufficient Acceptance of Payment Forms, as may be prescribed by the BIR for the use of – or to be accomplished by – the bank, the collection agent or the Treasurer, showing the acceptance of the amnesty tax payment. In case of the authorized agent bank, the branch manager or the assistant branch manager shall sign the acceptance of payment form.
The Acceptance of Payment Form, the Notice of Availment, the SALN, and the Tax Amnesty Return shall be submitted to the RDO, which shall be received only after complete payment. The completion of these requirements shall be deemed full compliance with the provisions of RA 9480.
4. Time for Filing and Payment of Amnesty Tax. – The filing of the Tax Amnesty Return, together with the SALN, and the payment of the amnesty tax shall be made within six (6) months from the effectivity of these Rules.
SEC. 7. Tax Amnesty Rates. – In order to enjoy the benefits of the tax amnesty program, the qualified taxpayers are required to pay an amnesty tax equivalent to five percent (5%) of their total declared networth as of December 31, 2005, as declared in the SALN as of the said period, or resulting increase in networth by amending such previously filed statements for purposes of this tax amnesty, thereby including still undeclared assets and/or liabilities, as the case may be, as of December 31, 2005, or the absolute minimum amnesty payment, whichever is higher, in accordance with the following schedule:
1. Individuals (whether resident or nonresident citizens, including resident or nonresident aliens), Estates and Trusts - 5% or P50,000, whichever is higher
2. Corporations
(a) With subscribed capital of above P50 Million - 5% or P500,000, whichever is higher
(b) With subscribed capital of above P20 Million up to P50 Million - 5% or P250,000,whichever is higher
(c) With subscribed capital of P5 Million to P20 Million - 5% or P100,000, whichever is higher
(d) With subscribed capital of below P5 Million - 5% or P25,000, whichever is higher
3. Other juridical entities, including partnerships, but not limited to, cooperatives and foundations, that have become taxable as of December 31, 2005 - 5% or P50,000, whichever is higher
4. Taxpayers who filed their balance sheet/SALN, together with their income tax returns
for 2005, and who desire to avail of the tax amnesty under this Act by amending such previously filed statements thereby including still undeclared assets and/or liabilities - 5% based on the resulting increase in networth or the minimum absolute amounts of amnesty tax prescribed above, whichever is higher
RULE IV
STATEMENT OF ASSETS, LIABILITIES AND NETWORTH
SEC. 8. Contents of the SALN. – The SALN shall contain a true and complete declaration of assets liabilities and networth of the taxpayer as of December 31, 2005 as follows:
1. Assets within or without the Philippines, whether real or personal, tangible or intangible, whether or not used in trade or business:
a. Real properties shall be accompanied by a description of their classification, exact location, and valued at acquisition cost, if acquired by purchase, or the zonal valuation or fair market value, whichever is higher, if acquired through inheritance or donation;
b. Personal properties other than money, shall be accompanied by a specific description of the kind and number of assets (i.e. automobiles, shares of stock, etc.) or other investments, indicating the acquisition cost less depreciation or amortization, in proper cases, if acquired by purchase, or the fair market price or value at the time of receipt, if acquired through inheritance or donation;
c. Assets denominated in foreign currency shall be converted into the corresponding Philippine currency equivalent, at the rate of exchange prevailing as of December 31, 2005; and
d. Cash on hand and in bank in peso as of December 31, 2005, as well as Cash on Hand and in Bank in foreign currency, converted to peso as of December 31, 2005.
2. All existing liabilities which are legitimate and enforceable, secured or unsecured, whether or not incurred in trade or business, disclosing or indicating clearly the name and address of the creditor and the amount of the corresponding liability.
3. The total networth of the taxpayer, which shall be the difference between the total assets and total liabilities.
SEC. 9. Presumption of Correctness of the SALN. – The corresponding SALN as of December 31, 2005 filed by a taxpayer desiring to avail of the tax amnesty shall be presumed true and correct, except in the following cases:
1. Where the amount of the declared networth is understated to the extent of thirty percent (30%) or more as may be established in proceedings initiated within one (1)- year following the date of filing of the Tax Amnesty Return and the SALN, by, or at the instance of parties other than the BIR or its agents, as when any person, entity or government agency informs the BIR, with sufficient evidence, that the amount of the declared networth is understated to the extent of thirty percent (30%) or more.
2. When findings of or admission in congressional hearings or proceedings in administrative agencies of the government, and in courts, prove that there is at least thirty percent (30%) underdeclaration.
RULE V
IMMUNITIES AND PRIVILEGES
SEC. 10. Immunities and Privileges. – Taxpayers who have fully complied with the conditions under RA 9480 and these rules shall be entitled to the following immunities and privileges:
1. The taxpayer shall be immune from the payment of taxes, as well as additions thereto, and the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to pay any and all internal revenue taxes for taxable year 2005 and prior years.
2. The taxpayer’s Tax Amnesty Return and the SALN as of December 31, 2005 shall not be admissible as evidence in all proceedings that pertain to taxable year 2005 and prior years, insofar as such proceedings relate to internal revenue taxes, before judicial, quasi-judicial or administrative bodies in which he is a defendant or respondent and, except for the purpose of ascertaining the networth beginning January 1, 2006, the same shall not be examined, inquired or looked into by any person or government office. However, the taxpayer may use this as a defense, whenever appropriate, in cases brought against him.
3. The books of accounts and other records of the taxpayer for the years covered by the tax amnesty availed of shall not be examined by the BIR. However, the Commissioner of Internal Revenue may authorize in writing the examination of the said books of accounts and other records to verify the validity or correctness of a claim for any tax refund, tax credit (other than refund or credit of taxes withheld on wages), tax incentives, and/or exemptions under existing laws.
The above-stated immunities and privileges shall not apply where the person failed to file a SALN and the Tax Amnesty Return, or where the amount of networth as of December 31, 2005 is proven to be understated to the extent of thirty percent (30%) or more, in accordance with the provisions of Section 4 of RA 9480 and Section 9, Rule IV hereof.
RULE VI
OFFENSES AND PENALTIES
SEC. 11 . Penalties. – For violations of RA 9480, the following rules on sanctions and penalties shall apply:
1. Any person who, having filed a Tax Amnesty Return or SALN under this Act, willfully understates his networth to the extent of thirty percent (30%) or more shall, upon conviction, be subject to the penalties of perjury under the Revised Penal Code.
2. The willful failure to declare any property in the SALN and/or in the Tax Amnesty Return shall be deemed a prima facie evidence of fraud and shall constitute a ground upon which attachment of such property may be issued in favor of the BIR to answer for the satisfaction of any judgment that may be acquired against the declarant.
3. In addition to the penalties provided in paragraphs (1) and (2) above, immediate tax fraud investigation shall be conducted to collect all taxes due, including increments, and to criminally prosecute those found to have willfully evaded lawful taxes due.
4. In the case of associations, partnerships, or corporations, the penalty shall be imposed on the partner, president, general manager, branch manager, treasurer, officer- in-charge and employees responsible for the violation.
5. If the offender is an officer or employee of the BIR or any government entity, he/she sha ll likewise suffer an additional penalty of perpetual disqualification to hold public office, to vote and to participate in any public election.
SEC. 12. Unlawful Divulgence. – Any person who makes an unlawful divulgence of the Tax Amnesty Return or the SALN shall be penalized by a fine of not less than Fifty Thousand Pesos (P50,000.00) and imprisonment of not less than six years but not more than ten (10) years. However, the Commissioner of Internal Revenue may disclose the content of the Tax Amnesty Return and the SALN upon request of the Congress and in aid of legislation pursuant to and strictly in accordance with Section 20 (A) or Section 290 of the Tax Code.
RULE VII
FINAL PROVISIONS
SEC. 13. Information Management Program. – For purposes of enhancing revenue administration, revenue collection and policy formulation, the DOF in coordination with the BIR, Land Registration Authority, Department of Trade and Industry, Securities and Exchange Commission, Land Transportation Office, and other concerned agencies shall institute an Information Management Program (IMP) for the effective use of information declared or obtainable from the Tax Amnesty Returns and the SALNs required to the filed under RA 9480 and these Rules. To ensure the efficiency and accuracy of the IMP, all the abovenamed agencies shall share and submit all the necessary data and information that shall be requested by the DOF for the purpose, as soon as they are available.
The amount equivalent to Four Hundred Million Pesos (P400,000,000.00) from the collections of the tax amnesty program shall accrue to the DOF and shall be used exclusively for purposes of instituting a Management Information System as mandated under Section 12 of RA 9480.
SEC. 14. Publication of List of Taxpayers and Filers. – As provided under Section 14 of RA 9480, the provisions of Sections 71 and 270 of the Tax Code and Section 26 of Republic Act No. 6388 to the contrary notwithstanding, the Commissioner of Internal Revenue shall, on or before May 31 following close of each calendar year, prepare a list containing the names of all taxpayers, their gross income and amount of income taxes paid for the immediately preceding taxable year, and allow the publication of the same in at least two newspapers of general circulation or the Bureau of Internal Revenue website.
SEC. 15. Moratorium on the Grant of Tax Amnesty. – In order to encourage and improve tax compliance by taxpayers, it is hereby declared as a matter of policy that the grant of tax amnesty, in whatever manner and form, shall not henceforth be allowed, provided that this moratorium shall likewise apply to any administrative tax amnesty by the BIR. It is understood, however, that any compromise or abatement under Sec. 204 of the National Internal Revenue Code of 1997, as amended, shall not be construed as an administrative amnesty.
SEC. 16. Separability Clause. – If for any reason, any section or provision of these Rules be declared unconstitutional or invalid, such parts not affected shall remain in full force and effect.
SEC. 17. Repealing Clause. – All orders, circulars, memoranda, and other issuances, or parts thereof, which are inconsistent with these Rules, are hereby repealed or modified accordingly.
SEC. 18. Effectivity. – These Rules shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation.
DONE in the city of Manila, Philippines, this 15th day of August 2007.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance”
All internal revenue officials and others concerned are hereby enjoined to be guided accordingly and to give this Circular as wide a publicity as possible.
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
REVENUE MEMORANDUM CIRCULAR NO. 53-2007
SUBJECT : Reiteration of the Amendment Made by RA 9337 Imposing VAT on the Sale of Non-food Agricultural Products, Marine and Forest Products and on the Sale of Cotton and Cotton Seeds in Their Original State.
TO : All Internal Revenue Officers and Others Concerned.
Prior to the enactment of Republic Act No. 9337 which amended certain provisions of the National Internal Revenue Code of 1997, as amended, Section 109, specifically items (a) and (b) thereof, has included the “sale of non-food agricultural products; marine and forest products in their original state by the primary producer or the owner of the land where the same are produced” as well as the “sale of cotton and cotton seeds in their original state; and copra” as among the transactions exempt from the imposition of VAT. However, with the promulgation of Republic Act No. 9337, these abovementioned exempt transactions were repealed by Section 7 of such Act when it amended Section 109 by excluding from the enumeration of VAT-exempt transactions the said aforementioned provisions.
Revenue Regulations No. 16-2005 implementing the provisions of Republic Act No. 9337 became effective beginning November 1, 2005. Thus, beginning such date, primary producers of non- food agricultural products; marine and forest products, including owners of the land where the same are produced; as well as sellers of cotton and cotton seeds in their original state are already subject to VAT at the rate of ten percent (10%) from November 2005 to January 2006 and to the rate of twelve percent (12%) beginning February 2006 onwards.
As such, these taxpayers are expected to have already filed their respective VAT declarations and paid the VAT due on these newly covered VAT transactions beginning said period. In case they have inadvertently failed to file the VAT returns required or have wrongly continued to declare these transactions as VATexempt in their respective VAT returns filed beginning November 2005, they are hereby encouraged to make the necessary corrections and self assessments thereon in order that these transactions may properly be reflected in their rightful category as transactions subject to VAT with the corresponding payment of the deficiency VAT due therefrom.
For this purpose, all district offices are likewise directed to review the VAT returns filed by these taxpayers beginning on the month of November 2005 and onwards, check whether these previously exempt transactions have been declared for VAT purposes and issue deficiency assessments thereon if found to be otherwise.
All internal revenue officers and others concerned are hereby enjoined to give this Circular as wide a publicity as possible.
(Original Signed)
LILIAN B. HEFTI
OIC, Commissioner of Internal Revenue
Rmc non food agricultural products VAT
TO : All Internal Revenue Officers and Others Concerned.
Prior to the enactment of Republic Act No. 9337 which amended certain provisions of the National Internal Revenue Code of 1997, as amended, Section 109, specifically items (a) and (b) thereof, has included the “sale of non-food agricultural products; marine and forest products in their original state by the primary producer or the owner of the land where the same are produced” as well as the “sale of cotton and cotton seeds in their original state; and copra” as among the transactions exempt from the imposition of VAT. However, with the promulgation of Republic Act No. 9337, these abovementioned exempt transactions were repealed by Section 7 of such Act when it amended Section 109 by excluding from the enumeration of VAT-exempt transactions the said aforementioned provisions.
Revenue Regulations No. 16-2005 implementing the provisions of Republic Act No. 9337 became effective beginning November 1, 2005. Thus, beginning such date, primary producers of non- food agricultural products; marine and forest products, including owners of the land where the same are produced; as well as sellers of cotton and cotton seeds in their original state are already subject to VAT at the rate of ten percent (10%) from November 2005 to January 2006 and to the rate of twelve percent (12%) beginning February 2006 onwards.
As such, these taxpayers are expected to have already filed their respective VAT declarations and paid the VAT due on these newly covered VAT transactions beginning said period. In case they have inadvertently failed to file the VAT returns required or have wrongly continued to declare these transactions as VATexempt in their respective VAT returns filed beginning November 2005, they are hereby encouraged to make the necessary corrections and self assessments thereon in order that these transactions may properly be reflected in their rightful category as transactions subject to VAT with the corresponding payment of the deficiency VAT due therefrom.
For this purpose, all district offices are likewise directed to review the VAT returns filed by these taxpayers beginning on the month of November 2005 and onwards, check whether these previously exempt transactions have been declared for VAT purposes and issue deficiency assessments thereon if found to be otherwise.
All internal revenue officers and others concerned are hereby enjoined to give this Circular as wide a publicity as possible.
(Original Signed)
LILIAN B. HEFTI
OIC, Commissioner of Internal Revenue
Rmc non food agricultural products VAT
REVENUE REGULATIONS NO. 10-2007
SUBJECT : Amending Further Section 3 of Revenue Regulations (RR) No. 9-2001, as last amended by RR No. 5-2004, Expanding the Coverage of Taxpayers Required to File Returns and Pay Taxes Through the Electronic Filing and Payment System (EFPS) of the Bureau of Internal Revenue.
TO : All Internal Revenue Officials and Others Concerned.
_____________________________________________________________________
Section 1. SCOPE. Pursuant to the provisions of Section 244 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9337, these regulations are hereby promulgated in order to further amend Section 3 of RR No. 9-2001, as last amended by RR No. 5-2004, by expanding the coverage thereof to include: (i) corporations with paid-up capital stock of Ten Million Pesos (P10,000,000.00) and above; (ii) corporations with complete computerized system; and (iii) all government bidders pursuant to Executive Order No. 398 as implemented by RR 3-2005. It should be emphasized, however, that non-stock non-profit corporations are excluded from the coverage of this regulations.
Section 2. DEFINITION OF TERMS. –
2.1 xxx xxx xxx
2.2 xxx xxx xxx
2.13 Paid-up capital stock - shall mean that portion of the authorized capital stock which has been both subscribed and paid. It also refers to the amount paid for the subscription of stock in a corporation including the amount paid in excess of par value, net of treasury stock.
2.14 Complete computerized system - refers to the books of accounts and other accounting records in electronic form, in accordance with Revenue Regulations No. 16-2006.
Section 3. COVERAGE. Section 3 of Revenue Regulations (RR) No. 9-2001, as amended by RR Nos. 2-2002, 9-2002 and 5-2004, is hereby further amended to read as follows:
"Section 3. - COVERAGE.- xxx xxx xxx
3.2. Non-large taxpayers. – The following Non-Large Taxpayers including their branches located in the computerized revenue district offices shall file their returns and pay their taxes thru EFPS, to wit:
3.2.1. The volunteering two hundred (200) or more Non-Large Taxpayers previously identified by the BIR to have availed of the option to file their returns under EFPS shall nevertheless continue to file their returns under such method. However, upon their receipt of a notification letter duly signed by the Commissioner of Internal Revenue, it becomes mandatory for them, including their branches located in the computerized revenue district offices, to file their returns and pay their taxes thru EFPS.
3.3. Other Taxpayers -
3.3.1. Corporations with paid-up capital stock of Ten Million Pesos (P10,000,000.00) and above;
3.3.2. Corporations with complete computerized system;
3.3.3 Taxpayers joining public bidding pursuant to Executive Order No. 398 as implemented by RR 3-2005.
xxx xxx xxx”
Section 4. REPEALING CLAUSE. – The provisions of Revenue Regulations No. 9-2001, 2-2002, 9-2002, 5-2004 and all other revenue issuances inconsistent herewith are hereby repealed, modified or amended accordingly.
Section 5. EFFECTIVITY CLAUSE. - These Regulations shall take effect on all returns to be filed in October, 2007 or after fifteen (15) days following publication in a newspaper of general circulation, whichever comes later.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC, Commissioner of Internal Revenue
TO : All Internal Revenue Officials and Others Concerned.
_____________________________________________________________________
Section 1. SCOPE. Pursuant to the provisions of Section 244 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9337, these regulations are hereby promulgated in order to further amend Section 3 of RR No. 9-2001, as last amended by RR No. 5-2004, by expanding the coverage thereof to include: (i) corporations with paid-up capital stock of Ten Million Pesos (P10,000,000.00) and above; (ii) corporations with complete computerized system; and (iii) all government bidders pursuant to Executive Order No. 398 as implemented by RR 3-2005. It should be emphasized, however, that non-stock non-profit corporations are excluded from the coverage of this regulations.
Section 2. DEFINITION OF TERMS. –
2.1 xxx xxx xxx
2.2 xxx xxx xxx
2.13 Paid-up capital stock - shall mean that portion of the authorized capital stock which has been both subscribed and paid. It also refers to the amount paid for the subscription of stock in a corporation including the amount paid in excess of par value, net of treasury stock.
2.14 Complete computerized system - refers to the books of accounts and other accounting records in electronic form, in accordance with Revenue Regulations No. 16-2006.
Section 3. COVERAGE. Section 3 of Revenue Regulations (RR) No. 9-2001, as amended by RR Nos. 2-2002, 9-2002 and 5-2004, is hereby further amended to read as follows:
"Section 3. - COVERAGE.- xxx xxx xxx
3.2. Non-large taxpayers. – The following Non-Large Taxpayers including their branches located in the computerized revenue district offices shall file their returns and pay their taxes thru EFPS, to wit:
3.2.1. The volunteering two hundred (200) or more Non-Large Taxpayers previously identified by the BIR to have availed of the option to file their returns under EFPS shall nevertheless continue to file their returns under such method. However, upon their receipt of a notification letter duly signed by the Commissioner of Internal Revenue, it becomes mandatory for them, including their branches located in the computerized revenue district offices, to file their returns and pay their taxes thru EFPS.
3.3. Other Taxpayers -
3.3.1. Corporations with paid-up capital stock of Ten Million Pesos (P10,000,000.00) and above;
3.3.2. Corporations with complete computerized system;
3.3.3 Taxpayers joining public bidding pursuant to Executive Order No. 398 as implemented by RR 3-2005.
xxx xxx xxx”
Section 4. REPEALING CLAUSE. – The provisions of Revenue Regulations No. 9-2001, 2-2002, 9-2002, 5-2004 and all other revenue issuances inconsistent herewith are hereby repealed, modified or amended accordingly.
Section 5. EFFECTIVITY CLAUSE. - These Regulations shall take effect on all returns to be filed in October, 2007 or after fifteen (15) days following publication in a newspaper of general circulation, whichever comes later.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC, Commissioner of Internal Revenue
REVENUE REGULATIONS NO. 9-2007
SUBJECT : Prescribing the Updated Minimum Monthly/Quarterly Gross Receipts in Computing the Percentage Tax of Domestic Carriers and Keepers of Garages.
TO : All Internal Revenue Officers and Others Concerned.
SECTION 1. SCOPE. - Pursuant to Section 244 of the National Internal Revenue Code of 1997 (Code), in relation to Section 128 of the same Code which provides the Commissioner the power to prescribe the minimum amount of gross receipts, sales, and taxable base of persons subject to other percentage taxes under Title V of the Code, after taking into account the sales, receipts or other taxable base of other persons engaged in similar businesses under similar situations or circumstances, or after considering other relevant information, these Regulations are hereby promulgated to update the minimum monthly/quarterly gross receipts of domestic carriers and keepers of garages subject to the three percent (3%) percentage tax imposed under Section 117 of the Code, as amended by RA 9337, and further amended by RA 9361.
SEC. 2. MINIMUM GROSS RECEIPTS OF DOMESTIC LAND CARRIERS AND KEEPERS OF GARAGES. – Cars for rent or hire driven by the lessee; transportation contractors, including persons who transport passengers for hire, and other domestic carriers by land for the transport of passengers (except owners of animal-drawn two-wheeled vehicle), and keepers of garages shall pay a tax equivalent to three percent (3%) of their quarterly gross receipts. Using the average consumer price index (CPI) for the transportation and communication sector in Year 2006, it is apparent that the minimum gross receipts per unit of carrier set under Section 117 of the Code, which figures were originally fixed in Year 1978, are no longer reflective of the true value of the minimum gross receipts that are being derived by domestic land carriers, as shown in the sample computation illustrated below:
(a) Average Consumer Price Indices where Year 2000 is considered as the international base year:
(1) Year 1978 - P 6.38
(2) Year 2000 - P100.00
(3) Year 2006 - P174.60
(b) Using the average consume r price index (CPI) provided in item (a) above, the formula to arrive at the present value is as follows:
2006 Gross Receipts = 1978 Gross Receipts x CPI 2006 / CPI 1978
(c) Sample Computation :
Jeepneys in Manila and Other Cities -
2006 Gross Receipts = (P2,400 x P174.60) / P6.38
= P 65,680.25 ~ P 65,700.00
======== ========
Thus, after considering the foregoing relevant information, the updated minimum gross receipts per unit of carrier for purposes of computing the percentage tax provided in Section 117 of the Code as of year 2006 price index shall be as follows:
For clarification, common carriers which ply the routes from/to Metro Manila and/or other cities in the country shall be covered by the prescribed minimum gross receipts for Manila and other cities.
SEC. 3. EFFECTIVITY CLAUSE. - These Regulations shall take effect beginning August 1, 2007, or after fifteen (15) days following complete publication in a newspaper of general circulation, whichever comes later.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
TO : All Internal Revenue Officers and Others Concerned.
SECTION 1. SCOPE. - Pursuant to Section 244 of the National Internal Revenue Code of 1997 (Code), in relation to Section 128 of the same Code which provides the Commissioner the power to prescribe the minimum amount of gross receipts, sales, and taxable base of persons subject to other percentage taxes under Title V of the Code, after taking into account the sales, receipts or other taxable base of other persons engaged in similar businesses under similar situations or circumstances, or after considering other relevant information, these Regulations are hereby promulgated to update the minimum monthly/quarterly gross receipts of domestic carriers and keepers of garages subject to the three percent (3%) percentage tax imposed under Section 117 of the Code, as amended by RA 9337, and further amended by RA 9361.
SEC. 2. MINIMUM GROSS RECEIPTS OF DOMESTIC LAND CARRIERS AND KEEPERS OF GARAGES. – Cars for rent or hire driven by the lessee; transportation contractors, including persons who transport passengers for hire, and other domestic carriers by land for the transport of passengers (except owners of animal-drawn two-wheeled vehicle), and keepers of garages shall pay a tax equivalent to three percent (3%) of their quarterly gross receipts. Using the average consumer price index (CPI) for the transportation and communication sector in Year 2006, it is apparent that the minimum gross receipts per unit of carrier set under Section 117 of the Code, which figures were originally fixed in Year 1978, are no longer reflective of the true value of the minimum gross receipts that are being derived by domestic land carriers, as shown in the sample computation illustrated below:
(a) Average Consumer Price Indices where Year 2000 is considered as the international base year:
(1) Year 1978 - P 6.38
(2) Year 2000 - P100.00
(3) Year 2006 - P174.60
(b) Using the average consume r price index (CPI) provided in item (a) above, the formula to arrive at the present value is as follows:
2006 Gross Receipts = 1978 Gross Receipts x CPI 2006 / CPI 1978
(c) Sample Computation :
Jeepneys in Manila and Other Cities -
2006 Gross Receipts = (P2,400 x P174.60) / P6.38
= P 65,680.25 ~ P 65,700.00
======== ========
Thus, after considering the foregoing relevant information, the updated minimum gross receipts per unit of carrier for purposes of computing the percentage tax provided in Section 117 of the Code as of year 2006 price index shall be as follows:
| DOMESTIC CARRIERS | Year 1978 | Year 2006 | Year 2006 |
| Jeepney for hire - 2. Provincial | P2,400.00 1,200.00 | P65,700.00 32,900.00 | P21,900.00 10,967.00 |
| Public Utility Bus - Exceeding 30 passengers Exceeding 50 passengers | P3,600.00 6,000.00 7,200.00 | P98,600.00 164,200.00 197,100.00 | P32,867.00 54,733.00 65,700.00 |
| Taxis - 2. Provincial | P3,600.00 2,400.00 | P98,600.00 65,700.00 | P32,867.00 21,900.00 |
| Car for hire (with chauffeur) | P3,000.00 | P82,100.00 | P27,367.00 |
| Car for hire (without chauffeur) | P1,800.00 | P49,300.00 | P 16,434.00 |
SEC. 3. EFFECTIVITY CLAUSE. - These Regulations shall take effect beginning August 1, 2007, or after fifteen (15) days following complete publication in a newspaper of general circulation, whichever comes later.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
REVENUE REGULATIONS NO. 8-2007
SUBJECT: Additional Compliance Requirements of Concerned Taxpayers in the Light of Mandatory Adoption of the Philippine Financial Reporting Standards.
TO : All Internal Revenue Officers and Others Concerned
______________________________________________________________________
SECTION 1. Scope – Pursuant to Section 244 , in relation to Sec. 5, both of the National Internal Revenue Code (NIRC) of 1997, these Regulations are hereby issued to prescribe additional compliance requirements from taxpayers mandated to adopt the Philippine Financial Reporting Standards (PFRS) in recording business transactions and preparing financ ial statements.
SECTION 2. Additional Compliance Requirements of Concerned Taxpayers in the Light of Mandatory Adoption of the Philippine Financial Reporting Standards in Recording and Presenting Business Transactions and Results – The Philippines has adopted the International Financial Reporting Standards (IFRS) as the Philippine Financial Reporting Standards (PFRS) that should be observed by big corporate taxpayers in the recording of their business transactions and preparation of Financial Statements starting year 2005. Under the IFRS, the recording and the recognition of business transactions for financial accounting purposes, in a majority of situations, differ from the application of tax rules on the same transactions resulting to disparity of reports for financial accounting viv-a-vis tax accounting. Hence, there is a need to reconcile the disparity in a systematic and clear manner to avoid irritants between the taxpayer and the tax enforcer. Accordingly, concerned taxpayers are hereby mandated to maintain books and records that would reflect the reconciling items between Financial Statements figures and/or data with those reflected/presented in the filed Income Tax Return (ITR). The recording and presentation of the reconciling items in such books and records shall be done in such a manner that would facilitate the understanding by the examiners/auditors of the Bureau of Internal Revenue tasked to undertake audit/investigation functions, providing in sufficient detail the computation of the differences and the reasons therefore aimed at bringing into agreement the IFRS and ITR figures.
SECTION 3. Start of Keeping of Books and Records - The keeping of books and records for the reconciling items referred to in the preceding Section shall start for taxable year 2007. For this purpose ‘taxable year 2007’ shall mean calendar year ending December 31, 2007 and all fiscal years ending not later than June 30, 2008.
SECTION 4. Repealing Clause – The provisions of internal revenue issuances inconsistent herewith are hereby repealed, modified or amended accordingly.
SECTION 5. Effectivity Clause – These regulations shall take effect after fifteen (15) days following publication in newspapers of general circulation.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
TO : All Internal Revenue Officers and Others Concerned
______________________________________________________________________
SECTION 1. Scope – Pursuant to Section 244 , in relation to Sec. 5, both of the National Internal Revenue Code (NIRC) of 1997, these Regulations are hereby issued to prescribe additional compliance requirements from taxpayers mandated to adopt the Philippine Financial Reporting Standards (PFRS) in recording business transactions and preparing financ ial statements.
SECTION 2. Additional Compliance Requirements of Concerned Taxpayers in the Light of Mandatory Adoption of the Philippine Financial Reporting Standards in Recording and Presenting Business Transactions and Results – The Philippines has adopted the International Financial Reporting Standards (IFRS) as the Philippine Financial Reporting Standards (PFRS) that should be observed by big corporate taxpayers in the recording of their business transactions and preparation of Financial Statements starting year 2005. Under the IFRS, the recording and the recognition of business transactions for financial accounting purposes, in a majority of situations, differ from the application of tax rules on the same transactions resulting to disparity of reports for financial accounting viv-a-vis tax accounting. Hence, there is a need to reconcile the disparity in a systematic and clear manner to avoid irritants between the taxpayer and the tax enforcer. Accordingly, concerned taxpayers are hereby mandated to maintain books and records that would reflect the reconciling items between Financial Statements figures and/or data with those reflected/presented in the filed Income Tax Return (ITR). The recording and presentation of the reconciling items in such books and records shall be done in such a manner that would facilitate the understanding by the examiners/auditors of the Bureau of Internal Revenue tasked to undertake audit/investigation functions, providing in sufficient detail the computation of the differences and the reasons therefore aimed at bringing into agreement the IFRS and ITR figures.
SECTION 3. Start of Keeping of Books and Records - The keeping of books and records for the reconciling items referred to in the preceding Section shall start for taxable year 2007. For this purpose ‘taxable year 2007’ shall mean calendar year ending December 31, 2007 and all fiscal years ending not later than June 30, 2008.
SECTION 4. Repealing Clause – The provisions of internal revenue issuances inconsistent herewith are hereby repealed, modified or amended accordingly.
SECTION 5. Effectivity Clause – These regulations shall take effect after fifteen (15) days following publication in newspapers of general circulation.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
REVENUE REGULATIONS NO. 7 - 2007
SUBJECT : Amending Certain Provisions of Revenue Regulations No. 21-2002, Implementing Section 6(H) of the Tax Code of 1997, Authorizing the Commissioner of Internal Revenue to Prescribe Additional Procedural and/or Documentary Requirements in Connection with the Preparation and Submission of Financial Statements Accompanying the Tax Returns.
TO : All Internal Revenue Officers and Others Concerned.
Pursuant to Section 244 of the Tax Code of 1997, as amended, in relation to Section 6(H) of the Same Code, these Regulations are hereby promulgated to amend certain provisions of Revenue Regulations No. 21-2002 prescribing the manner of compliance with any documentary and/or procedural requirements in connection with the preparation and submission of financial statements accompanying the tax returns.
SECTION 1. CONTENTS AND FORMAT OF FINANCIAL STATEMENTS TO BE ATTACHED TO THE ANNUAL INCOME TAX RETURN OR INFORMATION RETURN. – The Financial Statements with accompanying Auditor’s Certificate attached to the Annual Income Tax Return, or Annual Information Return for tax exempt persons, as the case may be, to be filed with the Bureau of Internal Revenue, thru its collection agents including Accredited Agent Banks, shall present/state the accounts therein in a very descriptive fashion such that the nature of the specific transactions entered in the accounts are known to the reader.
The account titles to be used must be specific and not control accounts which must be completely enumerated in the financial statements and these accounts must conform to the basic framework of the financial reporting standards promulgated by the Financial Reporting Standards Council (FRSC) of the Philippines which are the Generally Accepted Accounting Principles in the Philippines which include Philippine Accounting Standards (PAS) and Philippine Financial Reporting Standards (PFRS) and the refinements introduced thereon in respect to certain types of industries as well as to the rules and requirements of regulatory agencies that have supervision over them such as the Securities and Exchange Commission (SEC), Bangko Sentral ng Pilipinas (BSP), Insurance Commission (IC), etc.
The accounts prescribed in the reports required by the SEC, BSP, IC and other regulatory bodies shall likewise be the accounts to be used by individual taxpayers who are engaged in business or in the exercise of profession, except for accounts that are peculiar to corporations and other juridical persons.
The Profit and Loss Statement/Income Statement shall show separately by segment (there should be proper labeling), with breakdown of the specific accounts, the following:
I. Sales/Revenues
II. Cost of Goods Sold (for seller of goods)/Cost of Services (for seller of services);
III. Selling and Administrative Expenses;
IV. Financial Expenses, if any;
V. Other Income; and
VI. Other Expenses
(Note: Items I, IV, V and VI should be fully explained in the Notes to the Financial Statements; Items II and III should be supported by Schedules)
SEC. 2. COVERAGE. – The Financial Statements shall be composed of the following :
a) Balance Sheet;
b) Income Statement/Profit and Loss Statement;
c) Statement of Changes in Equity, showing either:
· All changes in equity
· Changes in equity, other than those arising from transactions with equity holders acting in their capacity as equity holders;
d) Statement of Cash Flow;
e) Notes, comprising a summary of significant accounting policies and other explanatory notes; and
e) Schedules attached to the afore-cited statements.
The submission of the above statements is mandatory even if there is no income, retained earnings, etc.
All the financial statements filed with accompanying auditor’s certificate as cited above shall show the comparative figures of the current year and the previous year. Thus, Financial Statements with no required Auditors Certificate as enunciated in Sec. 232 of the Tax Code of 1997, as amended, need not be presented in comparative format.
Moreover, it is the responsibility of the taxpayer to reflect in its books of accounts (i.e., general, subsidiary ledgers, and journals) the adopted/accepted year-end adjusting entries made corollary to the preparation and filing of its audited financial statements and annual income tax returns. Correspondingly, all the necessary working papers prepared by the taxpayer pertinent to the year-end adjustments shall, nevertheless, be made available to the investigating officers of the Bureau upon audit and/or verification.
SEC. 3. RESPONSIBILITY OF EXTERNAL AUDITORS. – Unless a longer period of retention is required under the Tax Code or other relevant laws (e.g. the Philippine Accountancy Act of 2004, etc.), the independent CPA who audited the records and certified the financial statements of the taxpayer, equally as the taxpayer, has the responsibility to maintain and preserve copies of the audited and certified financial statements for a period of three (3) years from the due date of filing the annual income tax return or the actual date of filing thereof, whichever comes later. This is in addition to all other responsibilities of the independent CPA under other pertinent provisions of the Tax Code, as amended, and implementing regulations, including generally accepted auditing standards, and applicable jurisprudence.
SEC. 4. PENAL PROVISIONS – Any independent Certified Public Accountant who, in his capacity as external auditor, willfully falsifies any report or statement bearing on any examination or audit, or renders a report, including exhibits, statements, schedules or other forms of accountancy work which has not been verified by him personally or under his supervision or by a member of his firm or by a member of his staff in accordance with sound auditing practices, or, certifies financial statements of a business enterprise containing an material misstatement of facts or material omission in respect of the transactions, taxable income, deduction and/or exemption of his client, shall be dealt with in accordance with Section 257 of the Tax Code, as amended, shall be subject to the applicable penalty provisions of RR No. 11-2006.
SEC. 5. APPLICABILITY OF THESE REGULATIONS. – These Regulations shall apply to all Income Tax and Information Returns to be filed hereafter.
SEC. 6. REPEALING CLAUSE. – All existing rules, regulations and other issuances or portions thereof inconsistent with the provisions of these Regulations are hereby modified, repealed or revoked accordingly.
SEC. 7. EFFECTIVITY CLAUSE. – These Regulations shall take effect after fifteen (15) days following complete publication in a newspaper of general circulation in the Philippines.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
TO : All Internal Revenue Officers and Others Concerned.
Pursuant to Section 244 of the Tax Code of 1997, as amended, in relation to Section 6(H) of the Same Code, these Regulations are hereby promulgated to amend certain provisions of Revenue Regulations No. 21-2002 prescribing the manner of compliance with any documentary and/or procedural requirements in connection with the preparation and submission of financial statements accompanying the tax returns.
SECTION 1. CONTENTS AND FORMAT OF FINANCIAL STATEMENTS TO BE ATTACHED TO THE ANNUAL INCOME TAX RETURN OR INFORMATION RETURN. – The Financial Statements with accompanying Auditor’s Certificate attached to the Annual Income Tax Return, or Annual Information Return for tax exempt persons, as the case may be, to be filed with the Bureau of Internal Revenue, thru its collection agents including Accredited Agent Banks, shall present/state the accounts therein in a very descriptive fashion such that the nature of the specific transactions entered in the accounts are known to the reader.
The account titles to be used must be specific and not control accounts which must be completely enumerated in the financial statements and these accounts must conform to the basic framework of the financial reporting standards promulgated by the Financial Reporting Standards Council (FRSC) of the Philippines which are the Generally Accepted Accounting Principles in the Philippines which include Philippine Accounting Standards (PAS) and Philippine Financial Reporting Standards (PFRS) and the refinements introduced thereon in respect to certain types of industries as well as to the rules and requirements of regulatory agencies that have supervision over them such as the Securities and Exchange Commission (SEC), Bangko Sentral ng Pilipinas (BSP), Insurance Commission (IC), etc.
The accounts prescribed in the reports required by the SEC, BSP, IC and other regulatory bodies shall likewise be the accounts to be used by individual taxpayers who are engaged in business or in the exercise of profession, except for accounts that are peculiar to corporations and other juridical persons.
The Profit and Loss Statement/Income Statement shall show separately by segment (there should be proper labeling), with breakdown of the specific accounts, the following:
I. Sales/Revenues
II. Cost of Goods Sold (for seller of goods)/Cost of Services (for seller of services);
III. Selling and Administrative Expenses;
IV. Financial Expenses, if any;
V. Other Income; and
VI. Other Expenses
(Note: Items I, IV, V and VI should be fully explained in the Notes to the Financial Statements; Items II and III should be supported by Schedules)
SEC. 2. COVERAGE. – The Financial Statements shall be composed of the following :
a) Balance Sheet;
b) Income Statement/Profit and Loss Statement;
c) Statement of Changes in Equity, showing either:
· All changes in equity
· Changes in equity, other than those arising from transactions with equity holders acting in their capacity as equity holders;
d) Statement of Cash Flow;
e) Notes, comprising a summary of significant accounting policies and other explanatory notes; and
e) Schedules attached to the afore-cited statements.
The submission of the above statements is mandatory even if there is no income, retained earnings, etc.
All the financial statements filed with accompanying auditor’s certificate as cited above shall show the comparative figures of the current year and the previous year. Thus, Financial Statements with no required Auditors Certificate as enunciated in Sec. 232 of the Tax Code of 1997, as amended, need not be presented in comparative format.
Moreover, it is the responsibility of the taxpayer to reflect in its books of accounts (i.e., general, subsidiary ledgers, and journals) the adopted/accepted year-end adjusting entries made corollary to the preparation and filing of its audited financial statements and annual income tax returns. Correspondingly, all the necessary working papers prepared by the taxpayer pertinent to the year-end adjustments shall, nevertheless, be made available to the investigating officers of the Bureau upon audit and/or verification.
SEC. 3. RESPONSIBILITY OF EXTERNAL AUDITORS. – Unless a longer period of retention is required under the Tax Code or other relevant laws (e.g. the Philippine Accountancy Act of 2004, etc.), the independent CPA who audited the records and certified the financial statements of the taxpayer, equally as the taxpayer, has the responsibility to maintain and preserve copies of the audited and certified financial statements for a period of three (3) years from the due date of filing the annual income tax return or the actual date of filing thereof, whichever comes later. This is in addition to all other responsibilities of the independent CPA under other pertinent provisions of the Tax Code, as amended, and implementing regulations, including generally accepted auditing standards, and applicable jurisprudence.
SEC. 4. PENAL PROVISIONS – Any independent Certified Public Accountant who, in his capacity as external auditor, willfully falsifies any report or statement bearing on any examination or audit, or renders a report, including exhibits, statements, schedules or other forms of accountancy work which has not been verified by him personally or under his supervision or by a member of his firm or by a member of his staff in accordance with sound auditing practices, or, certifies financial statements of a business enterprise containing an material misstatement of facts or material omission in respect of the transactions, taxable income, deduction and/or exemption of his client, shall be dealt with in accordance with Section 257 of the Tax Code, as amended, shall be subject to the applicable penalty provisions of RR No. 11-2006.
SEC. 5. APPLICABILITY OF THESE REGULATIONS. – These Regulations shall apply to all Income Tax and Information Returns to be filed hereafter.
SEC. 6. REPEALING CLAUSE. – All existing rules, regulations and other issuances or portions thereof inconsistent with the provisions of these Regulations are hereby modified, repealed or revoked accordingly.
SEC. 7. EFFECTIVITY CLAUSE. – These Regulations shall take effect after fifteen (15) days following complete publication in a newspaper of general circulation in the Philippines.
(Original Signed)
MARGARITO B. TEVES
Secretary of Finance
Recommending Approval:
(Original Signed)
LILIAN B. HEFTI
OIC-Commissioner of Internal Revenue
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