REVENUE REGULATIONS NO. 16 - 2008

SUBJECT : IMPLEMENTING THE PROVISIONS OF SECTION 34(L) OF THE TAX CODE OF 1997, AS AMENDED BY SECTION 3 OF REPUBLIC ACT NO. 9504, DEALING ON THE OPTIONAL STANDARD DEDUCTION (OSD) ALLOWED TO INDIVIDUALS AND
CORPORATIONS IN COMPUTING THEIR TAXABLE INCOME

TO : ALL REVENUE OFFICERS AND OTHERS CONCERNED

SECTION 1. SCOPE. - Pursuant to Sec. 244, in relation to Sec. 3 of Republic Act No. 9504 (RA 9504) amending Sec. 34(L) of the Tax Code of 1997 (Code), as amended, these Regulations are hereby promulgated in order to implement the provisions on Optional Standard Deduction (OSD) for individuals and corporations.

SEC. 2. PERSONS COVERED. - The following may be allowed to claim OSD in lieu of the itemized deductions (i.e. items of ordinary and necessary expenses allowed under Sections 34 (A) to (J) and (M), Section 37, other special laws, if applicable):

1. Individuals:

i. Resident Citizen

ii. Non-resident citizen

iii. Resident Alien

iv. Taxable estates and trusts

2. Corporations:

i. Domestic corporation

ii. Resident foreign corporation

SEC. 3. DETERMINATION OF THE AMOUNT OF OPTIONAL STANDARD DEDUCTION FOR INDIVIDUALS. - The OSD allowed to individual taxpayers shall be a maximum of forty percent (40%) of gross sales or gross receipts during the taxable year. If the individual is on the accrual basis of accounting for his income and deductions, the OSD shall be based on the gross sales during the taxable year. On the other hand, if the individual employs the cash basis of accounting for his income and deductions, the OSD shall be based on his gross receipts during the taxable year.

It should be emphasized that the “cost of sales” in case of individual seller of goods, or the “cost of services” in the case of individual seller of services, are not allowed to be deducted for purposes of determining the basis of the OSD pursuant to this Section inasmuch as the law (RA 9504) is specific as to the basis thereof which states that for individuals, the basis of the 40% OSD shall be the “gross sales” or “gross receipts” and not the “gross income” .

For other individual taxpayers allowed by law to report their income and deductions under a different method of accounting (e.g. percentage of completion basis, etc.) other than cash and accrual method of accounting , the “gross sales” or “gross receipts” pursuant to this Section shall be determined in accordance with said acceptable method of accounting.

SEC. 4. DETERMINATION OF THE AMOUNT OF OPTIONAL STANDARD DEDUCTION FOR CORPORATIONS. - In the case of corporate taxpayers subject to tax under Sections 27(A) and 28(A)(1) of the Code, as amended, the OSD allowed shall be in an amount not exceeding forty percent (40 %) of their gross income.

For purposes of these Regulations, “Gross Income” shall mean the gross sales less sales returns, discounts and allowances and cost of goods sold. “Gross sales” shall include only sales contributory to income taxable under Sec. 27(A) of the Code. “Cost of goods sold” shall include the purchase price or cost to produce the merchandise and all expenses directly incurred in bringing them to their present location and use. For trading or merchandising concern, “cost of goods sold” means the invoice cost of goods sold, plus import duties, freight in transporting the goods to the place where the goods are actually sold, including insurance while the goods are in transit.

For manufacturing concern, “cost of goods sold” means all costs incurred in the production of the finished goods such as raw materials used, direct labor and manufacturing overhead, freight cost, insurance premiums and other costs incurred to bring the raw materials to the factory or warehouse. The term may be used interchangeably with “cost of goods manufactured and sold”.

In the case of sellers of services, the term “gross income” means the “gross receipts” less sales returns, allowances, discounts and cost of services. “Cost of services” means all direct costs and expenses necessarily incurred to provide the services required by the customers and clients including (a) salaries and employee benefits of personnel, consultants and specialists directly rendering the service, and (b) cost of facilities directly utilized in providing the service such as depreciation or rental of equipment used and cost of supplies:

Provided, however, that “cost of services” shall not include interest expense except in the case of banks and other financial institutions. The term “gross receipts” as used herein means amounts actually or constructively received during the taxable year. However, for taxpayers engaged as sellers of services but employing the accrual basis of accounting for their income, the term “gross receipts” shall mean amounts earned as gross revenue during the taxable year.

The items of gross income under Section 32(A) of the Code, as amended, which are required to be declared in the income tax return of the taxpayer for the taxable year are part of the gross income against which the OSD may be deducted in arriving at taxable income.

Passive incomes which have been subjected to a final tax at source shall not form part of the gross income for purposes of computing the forty percent (40%) optional standard deduction.

For other taxpayers allowed by law to report their income and deductions under a different method of accounting (e.g. percentage of completion basis, etc.) other than cash and accrual method of accounting , the “gross income” pursuant to this Section shall be determined in accordance with said acceptable method of accounting.

SEC. 5. ILLUSTRATIVE EXAMPLES IN DETERMINING THE BASIS OF THE 40% OSD FOR INDIVIDUALS AND CORPORATIONS. –

Suppose

a retailer of goods, whose accounting method is under the accrual basis, has a gross sales of P1,000,000.00 with a cost of sales amounting to P800,000. The computation of the OSD for individuals and corporations shall be determined as follows:

	If Individual	If Corporation
Gross Sales	P 1,000,000	P 1,000,000
Less: Cost of Goods Sold		800,000
Basis of the OSD	P1,000,000	P 200,000
X OSD Rate (maximum)	.40	.40
OSD Amount	P 400,000	P 80,000

If the taxpayer opts to use the OSD in lieu of the itemized deduction allowed under Section 34 of the Code, as amended, his/ its net taxable income shall be as follows :

	If Individual	If Corporation
Gross Sales	P 1,000,000	P 1,000,000
Less : Cost of Sales	P 1,000,000	800,000
Gross Sales/Gross Income		P 200,000
Less : OSD (maximum)	400,000	80,000
Net Income	P 600,000	P 120,000

SEC. 6. DETERMINATION OF THE OPTIONAL STANDARD DEDUCTION FOR GENERAL PROFESSIONAL PARTNERSHIPS (GPPs) AND PARTNERS OF GPPs. – Pursuant to Sec. 26 of the Code, a GPP is not subject to income tax imposed under Title II thereof. However, the partners shall be liable to pay income tax on their separate and individual capacities for their respective distributive share in the net income of the GPP.

Sec. 26 of the Code likewise provides that- “For purposes of computing the distributive share of the partners, the net income of the GPP shall be computed in the same manner as a corporation.” As such, a GPP may claim either the itemized deductions allowed under Section 34 of the Code or in lieu thereof, it can opt to avail of the OSD allowed to corporations in claiming the deductions in an amount not exceeding forty percent (40 %) of its gross income. The net income determined by either claiming the itemized deduction or OSD from the GPP’s gross income is the distributable net income from which the share of each partner is to be determined. Each partner shall report as gross income his distributive share, actually or constructively received, in the net income of the partnership.

The GPP is not a taxable entity for income tax purposes since it is only acting as a “pass-through” entity where its income is ultimately taxed to the partners comprising it.

In computing taxable income defined under Section 31 of the Code, the individual partner can still claim either itemized deductions or optional standard deduction from his share in the net income of the GPP because said share is considered as gross income in the hands

of the partner (Section 32(A)(11) and Section 26, NIRC). If the GPP availed of the itemized deduction in computing its net income, the partners may still either claim itemized deduction or OSD from said share, provided, that, in claiming itemized deductions, the partner is precluded from claiming expenses already claimed by the GPP.

In fine, if the GPP claimed itemized deductions and a partner is also claiming itemized deductions, the deductions allowed to the partner must be the ordinary and necessary expenses for the practice of profession which were not yet claimed by the GPP in computing its net income. The GPP and each of the partners are entitled to their own election of deductions to claim during the taxable year thereby resulting to four possibilities, namely: (1) the GPP may claim itemized deductions in computing net income and a partner may also claim itemized deductions in computing his taxable income; or (2) the GPP may claim OSD in computing net income while a partner may claim itemized deductions in computing his taxable income; or (3) the GPP may claim itemized deductions in computing net income while a partner may claim OSD in computing his taxable income; or (4) the GPP may claim OSD in computing net income and a partner may also claim OSD in computing his taxable income.

SEC.7. OTHER IMPLICATIONS OF THE OPTIONAL STANDARD DEDUCTION. – A taxpayer who elected to avail of the OSD not exceeding forty percent (40%) of gross sales or gross receipts, in case of an individual taxable under Secs. 24(A) and 25(A)(1) of the Tax Code, or forty percent (40%) of gross income, in case of a corporation subject to tax under Sec. 27(A) or 28(A)(1) of the same Code shall signify in his/its return such intention, otherwise he/it shall be considered as having availed himself of the itemized deductions allowed under Sec. 34 of the Code. Once the election to avail the OSD is signified in the return, it shall be irrevocable for the taxable year for which the return is made. This means that a taxpayer who initially filed a return availing OSD is precluded from amending said return in order to shift to the itemized deductions.

An individual taxpayer who is entitled to and claimed the OSD shall not be required to submit with his tax return such financial statements otherwise required under the Code.

Provided, that, except when the Commissioner otherwise permits, the said individual shall keep such records pertaining to his gross sales or gross receipts. In the case of a corporation, however, said corporation is still required to submit its financial statements when it files its annual income tax return and to keep such records pertaining to its gross income as herein defined.

In the filing of the quarterly income tax returns, the taxpayer may opt to use either the itemized deduction or OSD. However, in filing the final adjustment income tax return, the taxpayer must make a choice as to what method of deduction it or he shall employ for the purpose of determining its/his taxable net income for the entire year. The taxpayer is, thus, not allowed to use a hybrid method of claiming its/his deduction for one taxable year.

SEC. 8 . TRANSITORY PROVISIONS. - For taxable period 2008 which is the initial year of the implementation of the 40% OSD under RA 9504 which modified the OSD for individuals from 10% of gross income to 40% of gross sales/gross receipts and introduced the OSD as an alternative deduction for corporations, the 40% maximum deduction shall only cover the period beginning the effectivity of RA 9504. RA9504 became effective July 06, 2008. However, in order to simplify and provide ease of administration during the transition period, July 1, 2008 shall be considered as the start of the period when the 40% OSD may be allowed.

In the case of an individual taxpayer, he is given the option to either use the itemized method of deduction or the 40% OSD in the filing of his quarterly income tax return covering the third quarter ending September 30, 2008. However, if in the filing of his annual income tax return and he chooses OSD to be his method of deduction, the rate of OSD to be applied for the period covering January 2008 to June 30, 2008 shall only be 10% of gross income (i.e., where gross income is determined by deducting cost of sales from the gross sales or gross receipts ) while the rate of OSD for the period covering July 01, 2008 to December 31, 2008 shall be 40% of gross sales/gross receipts.

Example. - Mr. ERA, a retailer of goods, uses the accrual method of accounting in reporting his income and expenses. For the period January to June 30, 2008, he reported his net income using the itemized method of deduction where his gross sales for the period amounted to P1,000,000 and his cost of sales for same period amounted to P600,000. With the effectivity of RA 9504, he decided to use the 40% OSD in claiming his business expenses for the third quarter covering July 01 to September 30, 2008. His gross sales for said period amounted to P700,000 where he claimed a 40% OSD (P700,000 x 40%) or P280,000 in lieu of his actual business expenses of P250,000 consisting of cost of sales of P200,000 and P50,000 operating expenses. For the last quarter of Year 2008, his gross sales amounted to P900,000 while his cost of sales for the same last quarter amounted to P500,000. If Mr. ERA decides to use the OSD method of deduction when he files his annual income tax return, his net income under the OSD method of determining deduction shall be as follows:

(a) To compute for OSD allowed for the various periods covering the Year 2008 -

	Jan. to June 30	July 01 to Sept	Oct . to December
Gross Sales	P 1,000,000	P 700,000	P 900,000
Less : Cost of Sales	600,000
Gross Sales / Gross Income	P 400,000	P 700,000	P 900,000
X OSD rate (maximum)	.10	.40	.40
OSD	P 40,000	P 280,000	P 360,000
	===========	===========	===========

(b) To compute for the net income of Mr. ERA under OSD the same shall be determined as follows :

Gross Sales (January to December 2008) P1,000,000 plus P700,000 plus P900,000)	P2,600,000
Less : Cost of Sales (from January to June 30, 2008)	600,000
Less : OSD (P 40,000 plus P280,00 plus P 360,000)	680,000
Net Income for Year 2008	P 1,320,000
	=========

As can be gleaned from the above illustration, an individual taxpayer is not allowed to compute his net income for Year 2008 partly by claiming itemized deduction and partly by using OSD. The choice of deduction to be used shall only be for one method of deduction (i.e., either itemized or OSD) to be applied for the entire year of Year 2008.

The provisions of Sec. 6 above preventing the use of the hybrid method of deduction for the entire taxable year, notwithstanding, a corporate taxpayer who opts to use the OSD method in claiming its deductions when filing its annual income tax return for Year 2008 shall be allowed to use the 40% OSD only in respect to the period beginning July 01, 2008 while the method of deduction to be used prior thereof shall remain to be under the itemized deduction method.

Example. - GSV Corporation, a retailer of goods, uses the accrual method of accounting in declaring its income and expenses under calendar year basis. For the period January to June 30, 2008, it reported its net income using the itemized method of deduction where its gross sales for the period amounted to P1,000,000 and its cost of sales for same period amounted to P600,000 as well as operating expenses of P100,000. With the effectivity of RA 9504, it decided to use the 40% OSD in claiming its business expenses for the third quarter covering July 01 to September 30, 2008. Its gross sales for said period amounted to P700,000 where it claimed a 40% OSD of gross income with cost of sales amounting to P 300,000 or P160,000 (i.e, P700,000 less P300,000 = P400,000 x 40% ) in lieu of its actual operating expenses of P50,000. For the last quarter of Year 2008, its gross sales amounted to P900,000 while its cost of sales for the same last quarter amounted to P600,000 and operating expenses of P150,000. If GSV Corporation decides to use the OSD method of deduction when it files its annual income tax return, its net income for the year shall be computed as follows:

(a) To compute for OSD allowed for the period from July 06 to December 31, 2008

	July 01 to Sept.	Oct. to December
Gross Sales	P 700,000	P 900,000
Less : Cost of Sales	300,000	600,000
Gross Sales / Gross Income	P 400,000	P 300,000
X OSD rate (maximum)	.40	.40
OSD	P 160,000	P 120,000
	============	============

(b) To compute for the net income of GSV Corporation , the net income for the period from January 1 to July 05, 2008 shall be computed using the itemized method of deduction while the 40% OSD shall be applied for the period covering July 06, 2008 to December 31, 2008.

Gross Sales (January to December 2008) (P1,000,000 plus P700,000 plus P900,000)			P2,600,000
Less : Cost of Sales January to June 30		P 600,000
July 01 to September 30		300,000
October 1 to December 31		600,000	1,500,000
Gross Income			P 1,100,000
Less : Deductions
Itemized Deductions (Operating expenses from January to June 30)		100,000
Optional Standard Deduction (OSD) (July 01 to September 30)	P160,000
(October 1 to December 31)	120,000	280,000	380,000
Net Income of GSV Corporation			P 720,000
			==========

SEC. 8. REPEALING CLAUSE. - All regulations, rules, orders or portions thereof which are inconsistent with the provisions of these Regulations are hereby amended, modified or repealed accordingly.

SEC. 9. EFFECTIVITY CLAUSE. - These Regulations shall take effect on July 6, 2008, the effectivity date of R.A. No. 9504.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE REGULATIONS NO. 15-2008

SUBJECT : Prescribing the Manner of Computing the Incremental Revenue to be Used as Basis of the Fifteen Percent (15%) Share of the Beneficiary Provinces Producing Burley and Native Tobacco in the Excise Tax Collection from Tobacco Products under Republic Act No. 8240

TO : All Internal Revenue Officers and Others Concerned

BACKGROUND:

Section 8 of Republic Act (R.A.) No. 8240 which took effect on January 1, 1997, provides that 15% of the incremental revenue collected from the excise tax on tobacco products shall be allocated and divided among the provinces producing burley and native tobacco in accordance with the volume of tobacco leaf produced, to be exclusively utilized for programs in pursuit of the objectives enumerated in the said Act. In the absence of the corresponding rules and regulations governing the determination of what constitutes “incremental revenue”, the above legislative requirement covered under the said Act could not be implemented. In accordance with the position taken by the legislative body, thru the Congressional Oversight Committee on Comprehensive Tax Reform Program, based on the minutes of deliberations by the Congress of the Philippines on the said Act, these revenue regulations are, therefore, prepared and issued to finally implement the said “incremental revenue” provisions.

SECTION 1. SCOPE. – Pursuant to the provisions of Section 244, in relation to Section 245 of the National Internal Revenue Code (NIRC) of 1997, as amended, these Regulations are hereby promulgated in order to prescribe the manner of computing the incremental revenue from excise tax on tobacco products to be used as basis of the 15% allocable share of the beneficiary provinces producing burley and native tobacco in the excise tax collection from tobacco products pursuant to the provisions of Section 8 of R.A. No. 8240, “An Act Amending Sections 138, 139, 140 and 142 of the National Internal Revenue Code, as Amended, and for Other Purposes”.

SECTION 2. MANNER OF COMPUTING THE INCREMENTAL REVENUE. –

The amount of incremental revenue collected from the excise tax on tobacco products, for purposes of determining the 15% allocable share of beneficiary provinces producing burley and native tobacco, shall be equivalent to the excess of the actual collection of excise taxes from tobacco products for the year under consideration over the calendar year 1996 as the base year, net of the incremental revenue collected from the increase in excise tax rates under R.A. No. 9334.

SECTION 3. REPEALING CLAUSE. – The provisions of any revenue regulations, rulings, or any other issuances inconsistent with these Regulations are hereby repealed, amended, or modified accordingly.

SECTION 4. EFFECTIVITY CLAUSE. – These Regulations shall take effect after fifteen (15) days following publication in any newspaper of general circulation.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

Recommending Approval:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue

REVENUE REGULATIONS NO. 14-2008

Subject: Amending Further Section 2.57.2(M) of Revenue Regulations No. 2-98, as Amended, Increasing the Coverage of Withholding Tax Agents Required to Withhold 1% from Regular Suppliers of Goods and 2% from Regular Suppliers of Services from the Top 10,000 Private Corporations to Top 20,000 Private Corporations

To: All Internal Revenue Officers and Others Concerned
-----------------------------------------------------------------------------------------------------------

SECTION 1. SCOPE. - Pursuant to the provisions of Section 244 of the Tax Code of 1997, as amended, in relation to Section 57(B) thereof, these Regulations are hereby promulgated to further amend Section 2.57.2(M) of Revenue Regulations No. 2-98, as amended, increasing the coverage of withholding tax agents who are required to withhold 1% from the regular suppliers of goods and 2% from the regular suppliers of services from the top ten thousand (10,000) private corporations to top twenty (20,000) private corporations.

SEC. 2. AMENDMENT. - Section 2.57.2(M) of Revenue Regulations 2-98, as amended, is hereby further amended to read as follows:

“Sec. 2.57. Withholding of Tax at Source. –

“Sec. 2.57.2. Income payment subject to creditable withholding tax and rates prescribed thereon. – Except as herein otherwise provided, there shall be withheld a creditable income tax at the rates herein specified for each class of payee from the following items of income payments to persons residing in the Philippines.

“x x x x x x x x x

“(M) Income payments made by the top twenty thousand (20,000) private corporations to their local/resident supplier of goods and local/resident supplier of services other than those covered by other rates of withholding tax. – Income payments made by any of the top twenty thousand (20,000) private corporations, as determined by the Commissioner, to their local/resident supplier of goods and local/resident supplier of services, including non-resident alien engaged in trade or business in the Philippines

Supplier of goods - - One percent (1%)

Supplier of services – Two percent (2%)

“Top twenty thousand (20,000) private corporations shall include a corporate taxpayer who has been determined and notified by the Bureau of Internal Revenue (BIR) as having satisfied any of the following criteria:

(a) Classified and duly notified by the Commissioner as a large taxpayer under Revenue Regulations No. 1-98, as amended, or belonging to the top five thousand (5,000) private corporations under RR 12-94, or to the top ten thousand (10,000) private corporations under RR 17-2003, unless previously de-classified as such or had already ceased business operations (automatic inclusion);

(b) Any taxpayer with net VAT paid or payable for the preceding year of at least P100,000;

(c) Any taxpayer with annual income tax paid or payable for the preceding year of at least P200,000;

(d) Any taxpayer with percentage taxes for the preceding year of at least P100,000;

(e) Any taxpayer whose gross sales for the preceding year is over P10,000,000;

(f) Any taxpayer whose gross purchases for the preceding year is over P5,000,000.

“The term “goods” pertains to tangible personal property. It does not include intangible personal property, as well as real property.

“The term “local/resident suppliers of goods” pertains to a supplier from whom any of the top twenty thousand (20,000) private corporations, as determined by the Commissioner, regularly makes its purchases of goods. As a general rule, this term does not include a casual purchase of goods, that is, purchase made from a non-regular supplier and oftentimes involving a single purchase. However, a single purchase which involves Ten thousand pesos (P10,000.00) or more shall be subject to a withholding tax.

The term “regular suppliers” refers to suppliers who are engaged in business or exercise of profession/calling with whom the taxpayer-buyer has transacted at least six (6) transactions, regardless of amount per transaction, either in the previous year or current year. The same rules apply to local/resident supplier of services other than those covered by separate rates of withholding tax.

“A corporation shall not be considered a withholding agent for purposes of this Section, unless such corporation has been determined and duly notified in writing by the Commissioner that it has been selected as one of the top twenty thousand (20,000) private corporations.

“Any corporation which has been duly classified and notified as large taxpayer by the Commissioner pursuant to RR 1-98, as amended, shall be automatically considered one of the top twenty thousand (20,000) private corporations, provided, however, that its authority as a withholding agent shall be effective only upon receipt of written notice from the Commissioner that it has been classified as a large taxpayer, as well as one of the top twenty thousand (20,000) private corporations, for purposes of these regulations.

“Any corporation shall remain a withholding agent for purposes of these regulations, unless the Commissioner notifies it in writing that it shall cease to be one.

The following, however, are some of the reasons that a taxpayer shall automatically cease to be a withholding agent, and therefore no prior written notice, for purposes of these regulations, is required, to wit:

(a) closure/cessation of business/dissolution (for taxpayer with notice of dissolution given to the BIR);

(b) merger/consolidation (for dissolved or absorbed corporation);

(c) any other form of business combination wherein by operation of law a corporate taxpayer loses its juridical personality.

“The withholding agent shall submit on a semestral basis a list of its regular suppliers of goods and/or services to the Large Taxpayers Assistance Division/Large Taxpayers District Office in the case of large taxpayers duly notified as such pursuant to RR 1-98, as amended, or Revenue District Office (RDO) having jurisdiction over the withholding agent’s principal place of business on or before July 31 and January 31 of each year.

“A government-owned or -controlled corporation previously classified as one of the top five thousand (5,000) corporations under RR 12-94, as amended, shall cease to be a withholding agent or included in the top twenty thousand (20,000) private corporations for purposes of these regulations but rather shall be treated as one under the succeeding sub-section (N) since it is already withholding 1% or 2% of the amount paid for the purchase of goods/services from local/resident suppliers.

“The Commissioner of Internal Revenue may recommend to the Secretary of Finance the amendment/modification to any or all of the criteria in the determination and selection of taxpayers forming part of the top twenty thousand (20,000) private corporations after considering such factors as inflation, volume of business, and similar factors. Provided, however, that the Commissioner is empowered to conduct periodic review as to the number of taxpayers who ceased to qualify under the category of top twenty thousand (20,000) private corporations for purposes of delisting them or excluding them from the list and to identify taxpayers to be added to the list of top twenty (20,000) private corporations.

“All taxpayers previously included in the list of top 5,000 private corporations under RR 12-94, as amended, and those who qualified as top ten thousand (10,000) private corporations under RR 17-2003 shall continue to withhold one percent (1%) for supplier of goods and 2% for supplier of services upon the effectivity of these Regulations, unless any of the following situations occur: (a) the Commissioner communicates in writing that they have ceased to qualify as taxpayers includible in the list of top twenty thousand (20,000) private corporations, or (b) those officially identified to have ceased business operations, or undergone any of the business combinations wherein by operation of law the juridical personality of said taxpayers ceased.”

SEC. 3. REPEALING CLAUSE. – All existing rules and regulations or parts thereof which are inconsistent with the provisions of these regulations are hereby modified, amended, revoked or repealed accordingly.

SEC. 4. EFFECTIVITY – These regulations shall take effect fifteen (15) days following publication in a newspaper of general circulation.

(Original Signed)
MARGARITO B. TEVES
Secretary of Finance

RECOMMENDING APPROVAL:

(Original Signed)
SIXTO S. ESQUIVIAS IV
Commissioner of Internal Revenue