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Guide to Philippine Taxes. EO Title III of the National Internal Revenue Code (NIRC) of , as amended. Sec. 85, supra. Chapter II. ESTATE. REPUBLIC OF THE PHILIPPINES). First Regular Session.) SENATE. S:NO. 3BO . Introduced by Senator Antonio "Sonny" F. Trillanes IV. EXPLANATORY NOTE. Principles of a Sound Tax System t ä. Impositions Under the Basic Philippine Tax. Law. - National Internal Revenue Code (NIRC), as amended.


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economic growth through the rationalization of the Philippine internal . Commissioner is hereby authorized to divide the Philippines into different zones or. the rationalization of the Philippine internal revenue tax system, follows: "XXX." SEC. 4. Section 6 of the NIRC, as amended, is hereby. Full text of the National Internal Revenue Code of the Philippines [Tax Reform Act of ]. Published on the World Wide Web by The Law Firm of Chan Robles.

Sources of Revenue. As used in this Section. Revenue District Officer. The tax imposed under this Title upon gains. Chapter 8. Every withholding agent required to deduct and withhold taxes under Section 57 shall furnish each recipient. Regional Director.

DD The term "regional or area headquarters" shall mean a branch established in the Philippines by multinational companies and which headquarters do not earn or derive income. Any gain from the sale or exchange of property which is treated or considered.

That commercial. The term 'ordinary loss' includes any loss from the sale or exchange of property which is not a capital asset. W The term "non-bank financial intermediary" means a financial intermediary. That debt instruments issued for interbank call loans with maturity of not more than five 5 days to cover deficiency in reserves against deposit liabilities. X The term "quasi-banking activities" means borrowing funds from twenty 20 or more personal or corporate lenders at any one time.

V The term "bank" means every banking institution. BB The term "mutual fund company" shall mean an open-end and close-end investment company as defined under the Investment Company Act.

Y The term "deposit substitutes" shall mean an alternative from of obtaining funds from the public the term 'public' means borrowing from twenty 20 or more individual or corporate lenders at any one time other than deposits. Except when otherwise provided in this Code: A A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines. FF The term "long-term deposit or investment certificates" shall refer to certificate of time deposit or investment in the form of savings.

B A nonresident citizen is taxable only on income derived from sources within the Philippines. C An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income derived from sources within the Philippines: C and D of this Section. Income Tax Rates. That a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an overseas contract worker.

E A domestic corporation is taxable on all income derived from sources within and without the Philippines. General Principles of Income Taxation in the Philippines. EE The term "regional operating headquarters" shall mean a branch established in the Philippines by multinational companies which are engaged in any of the following services: D An alien individual.

That if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses. The tax shall be computed in accordance with and at the rates established in the following schedule: Not over P That interest income from long-term deposit or investment in the form of savings. For married individuals. That effective January The provisions of paragraph 1 of this Subsection to the contrary..

That should the holder of the certificate pre-terminate the deposit or investment before the fifth 5th year.. That the tax liability. Three 3 years to less than 4 years. The provisions of Section 39 B notwithstanding. That the tax on dividends shall apply only on income earned on or after January 1. Income forming part of retained earnings as of December Four 4 years to less than five 5 years.

Tax on Nonresident Alien Individual. That cinematographic films and similar works shall be subject to the tax provided under Section 28 of this Code: Joint Venture Taxable as a Corporation or Association.

That the said tax exemption can only be availed of once every ten 10 years: A nonresident alien individual engaged in trade or business in the Philippines shall be subject to an income tax in the same manner as an individual citizen and a resident alien individual.

Section 22 G of this Code notwithstanding. A nonresident alien individual who shall come to the Philippines and stay therein for an aggregate period of more than one hundred eighty days during any calendar year shall be deemed a 'nonresident alien doing business in the Philippines'. Joint Account. That the historical cost or adjusted basis of the real property sold or disposed shall be carried over to the new principal residence built or acquired: That the Commissioner shall have been duly notified by the taxpayer within thirty 30 days from the date of sale or disposition through a prescribed return of his intention to avail of the tax exemption herein mentioned: There shall be levied.

For purposes of this Chapter. Three 3 years to less than four 4 years. That the same tax treatment shall apply to Filipinos employed and occupying the same position as those of aliens employed by these multinational companies. That the same tax treatment shall apply to Filipinos employed and occupying the same positions as those of aliens employed by these offshore banking units.

Capital gains realized by a nonresident alien individual not engaged in trade or business in the Philippines from the sale of shares of stock in any domestic corporation and real property shall be subject to the income tax prescribed under Subsections C and D of Section Capital gains realized from sale. A general professional partnership as such shall not be subject to the income tax imposed under this Chapter. D and E hereof shall be subject to the pertinent income tax.

Except as otherwise provided in this Code. Rates of Income tax on Domestic Corporations. That the President. In the case of corporations adopting the fiscal-year accounting period. That effective January 1. Their income and expenses for the fiscal year shall be deemed to have been earned and spent equally for each month of the period. For purposes of computing the distributive share of the partners. The reduced corporate income tax rates shall be applied on the amount computed by multiplying the number of months covered by the new rates within the fiscal year by the taxable income of the corporation for the period.

Persons engaging in business as partners in a general professional partnership shall be liable for income tax only in their separate and individual capacities.

That the same tax treatment shall apply to a Filipino employed and occupying the same position as an alien employed by petroleum service contractor and subcontractor. Any income earned from all other sources within the Philippines by the alien employees referred to under Subsections C.

Each partner shall report as gross income his distributive share. The provisions of existing special or general laws to the contrary notwithstanding. In the case of taxpayers engaged in the sale of service.

For a trading or merchandising concern. For purposes of this Section. For purposes of this Subsection. A "Proprietary educational institution" is any private school maintained and administered by private individuals or groups with an issued permit to operate from the Department of Education. B Proprietary Educational Institutions and Hospitals. Agencies or Instrumentalities. The election of the gross income tax option by the corporation shall be irrevocable for three 3 consecutive taxable years during which the corporation is qualified under the scheme.

For a manufacturing concern. C Government-owned or Controlled-Corporations. A final tax at the rates prescribed below shall be imposed on net capital gains realized during the taxable year from the sale. The Secretary of Finance is hereby authorized to suspend the imposition of the minimum corporate income tax on any corporation which suffers losses on account of prolonged.

Any excess of the minimum corporate income tax over the normal income tax as computed under Subsection A of this Section shall be carried forward and credited against the normal income tax for the three 3 immediately succeeding taxable years. Dividends received by a domestic corporation from another domestic corporation shall not be subject to tax..

Any income of nonresidents..

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That in the case of banks. For purposes of applying the minimum corporate income tax provided under Subsection E hereof. Rates of Income Tax on Foreign Corporations. The Secretary of Finance is hereby authorized to promulgate. The provisions of any law to the contrary notwithstanding. That tickets revalidated.

Interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements and royalties. That for a flight which originates from the Philippines. The tax shall be collected and paid in the same manner as provided in Sections 57 and 58 of this Code: Trust Funds and Similar Arrangements and Royalties.

Any income of nonresidents. B Tax on Nonresident Foreign Corporation. That effective 1. Lessor or Distributor. Machineries and Other Equipment.

A cinematographic film owner. A final tax at the rates prescribed below is hereby imposed upon the net capital gains realized during the taxable year from the sale.

Dividends received by a resident foreign corporation from a domestic corporation liable to tax under this Code shall not be subject to tax under this Title.

The improperly accumulated earnings tax imposed in the preceding Section shall apply to every corporation formed or availed for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation. In addition to other taxes imposed by this Title.

Imposition of Improperly Accumulated Earnings Tax. The improperly accumulated earnings tax as provided for under this Section shall not apply to: E Reasonable Needs of the Business. The following organizations shall not be taxed under this Title in respect to income received by them as such: A Labor. And reduced by the sum of: F Business league chamber of commerce. D Cemetery company owned and operated exclusively for the benefit of its members.

Exemptions from Tax on Corporations. The fact that the earnings or profits of a corporation are permitted to accumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid the tax upon its shareholders or members unless the corporation. In the case of corporations adopting the fiscal year accounting period. C A beneficiary society. D Improperly Accumulated Taxable Income. That for corporations using the calendar year basis.

E Nonstock corporation or association organized and operated exclusively for religious. B Mutual savings bank not having a capital stock represented by shares. G Civic league or organization not organized for profit but operated exclusively for the promotion of. Except when otherwise provided in this Title.

B Exclusions from Gross Income. Taxable Income Defined. J Farmers' or other mutual typhoon or fire insurance company. H A nonstock and nonprofit educational institution. Gross Income. I Government educational institution. Notwithstanding the provisions in the preceding paragraphs.

The following items shall not be included in gross income and. The term taxable income means the pertinent items of gross income specified in this Code. The proceeds of life insurance policies paid to the heirs or beneficiaries upon the death of the insured. That the benefits granted under this subparagraph shall be availed of by an official or employee only once.

The value of property acquired by gift. The amount received by the insured. Income of any kind. That the retiring official or employee has been in the service of the same employer for at least ten 10 years and is not less than fifty 50 years of age at the time of his retirement: That income from such property.

All prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad and sanctioned by their national sports associations.

Debentures or other Certificate of Indebtedness.

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That the total exclusion under this subparagraph shall not exceed Thirty thousand pesos P That the ceiling of Thirty thousand pesos P Medicare and Other Contributions. Gains realized from the same or exchange or retirement of bonds. Income derived from investments in the Philippines in loans. Gross benefits received by officials and employees of public and private entities: Gains realized by the investor upon redemption of shares of stock in a mutual fund company as.

Medicare and Pag-ibig contributions. Prizes and awards made primarily in recognition of religious. Income derived from any public utility or from the exercise of any essential governmental function accruing to the Government of the Philippines or to any political subdivision thereof. Special Treatment of Fringe Benefit. D and E of Section 25 shall be taxed at the applicable rates imposed thereat: B Fringe Benefit defined. The following fringe benefits are not taxable under this Section: That fringe benefit furnished to employees and taxable under Subsections B.

C Fringe Benefits Not Taxable. The tax herein imposed is payable by the employer which tax shall be paid in the same manner as provided for under Section 57 A of this Code. No deduction from gross income shall be allowed under Subsection A hereof unless the taxpayer shall substantiate with sufficient evidence. That any expense incurred for entertainment. Business or Professional Expenses. Deductions from Gross Income.

That the final tax imposed under Section 33 hereof has been paid. Except for taxpayers earning compensation income arising from personal services rendered under an employer-employee relationship where no deductions shall be allowed under this Section other than under subsection M hereof.

There shall be allowed as deduction from gross income all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on or which are directly attributable to.

A Expenses. Kickbacks and Other Similar Payments. B and C. No deduction from gross income shall be allowed under Subsection A hereof for any payment made. That taxes allowed under this Subsection. No deduction shall be allowed in respect of interest under the succeeding subparagraphs: That the taxpayer's otherwise allowable deduction for interest expense shall be reduced by an amount equal to the following percentages of the interest income subjected to final tax: B Interest.

The amount of interest paid or incurred within a taxable year on indebtedness in connection with the taxpayer's profession. That such interest shall be allowed a a deduction in the year the indebtedness is paid: At the option of the taxpayer. C Taxes. Taxes paid or incurred within the taxable year in connection with the taxpayer's profession.

That if the indebtedness is payable in periodic amortizations. In addition to the expenses allowable as deductions under this Chapter. If accrued taxes when paid differ from the amounts claimed as credits by the taxpayer. The credits provided for in Subsection C 3 of this Section may. In the case of such a tax incurred but not paid. An alien individual and a foreign corporation shall not be allowed the credits against the tax for the taxes of foreign countries allowed under this paragraph.

If the taxpayer elects to take such credits in the year in which the taxes of the foreign country accrued. The amount of the credit taken under this Section shall be subject to each of the following limitations: The bond herein prescribed shall contain such further conditions as the Commissioner may require.

In the case of a citizen of the Philippines and of a domestic corporation. In the case of a nonresident alien individual engaged in trade or business in the Philippines and a resident foreign corporation.

If the taxpayer signifies in his return his desire to have the benefits of this paragraph. In the case of any such individual who is a member of a general professional partnership or a beneficiary of an estate or trust. D Losses. That the time limit to be so prescribed in the rules and regulations shall not be less than thirty 30 days nor more than ninety 90 days from the date of discovery of the casualty or robbery.

The Secretary of Finance. That the time to be so prescribed in the rules and regulations shall not be less than thirty 30 days nor more than ninety 90 days from the date of discovery of the casualty or robbery. The credits provided in Subsection C 3 hereof shall be allowed only if the taxpayer establishes to the satisfaction of the Commissioner the following: Losses actually sustained during the taxable year and not compensated for by insurance or other forms of indemnity shall be allowed as deductions: That any net loss incurred in a taxable year during which the taxpayer was exempt from income tax shall not be allowed as a deduction under this Subsection: The net operating loss of the business or enterprise for any taxable year immediately preceding the current taxable year.

In the case of a nonresident alien individual or foreign corporation. That if such abandoned well is reentered and production is resumed. The entire amount of the loss shall be carried over to the first of the five 5 taxable years following the loss. In all cases. Debts due to the taxpayer actually ascertained to be worthless and charged off within the taxable year except those not connected with profession. Loss from sales or Exchanges of capital assets shall be allowed only to the extent provided in Section Losses from wagering transactions shall b allowed only to the extent of the gains from such transactions.

Losses from "wash sales" of stock or securities as provided in Section If securities as defined in Section 22 T become worthless during the taxable year and are capital assets.

That accumulated expenditures incurred in that area prior to January 1. That for mines other than oil and gas wells. For purposes of this subsection. E Bad Debts. That recovery of bad debts previously allowed as deduction in the preceding years shall be included as part of the.

If securities. An allowance for depreciation in respect of all properties directly related to production of petroleum. F Depreciation.

Where under rules and regulations prescribed by the Secretary of Finance upon recommendation of the Commissioner. In the case of property held by one person for life with remainder to another person. In the case of property held in trust. Any change in the agreed rate and useful life of the depreciable property as specified in the agreement shall not be effective for taxable years prior to the taxable year in which notice in writing by certified mail or registered mail is served by the party initiating such change to the other party to the agreement: The term "reasonable allowance" as used in the preceding paragraph shall include.

The responsibility of establishing the existence of such facts and circumstances shall rest with the party initiating the modification. There shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion.

That when the allowance for depletion shall equal the capital invested no further allowance shall be granted: In the case of oil and gas wells or mines.

Any intangible exploration. Properties not used directly in the production of petroleum shall be depreciated under the straight-line method on the basis of an estimated useful life of five 5 years. That after production in commercial quantities has commenced. That the contractor notifies the Commissioner at the beginning of the depreciation period which depreciation rate allowed by this Section will be used. That said costs shall not pertain to the acquisition or improvement of property of a character subject to the allowance for depreciation except that the allowances for depreciation on such property shall be deductible under this Subsection.

In the case of a nonresident alien individual engaged in trade or business or resident foreign corporation. The useful life of properties used in or related to production of petroleum shall be ten 10 years of such shorter life as may be permitted by the Commissioner. In computing taxable income from mining operations. Donations to the Government of the Philippines or to any of its agencies or political subdivisions.

Notwithstanding the provisions of the preceding subparagraph. The term "development expenditures" means expenditures paid or incurred during the development stage of the mine or other natural deposits. The term "exploration expenditures" means expenditures paid or incurred for the purpose of ascertaining the existence.

The election by the taxpayer to deduct the exploration and development expenditures is irrevocable and shall be binding in succeeding taxable years.

This paragraph shall not apply to expenditures for the acquisition or improvement of property of a character which is subject to the allowance for depreciation. Contributions or gifts actually paid or made within the taxable year to. In no case shall this paragraph apply with respect to amounts paid or incurred for the exploration and development of oil and gas.

The development stage of a mine or other natural deposit shall begin at the time when deposits of ore or other minerals are shown to exist in sufficient commercial quantity and quality and shall end upon commencement of actual commercial extraction. H Charitable and Other Contributions. In the case of a nonresident alien individual engaged in trade or business in the Philippines or a resident foreign corporation.

Subject to such terms and conditions as may be prescribed by the Secretary of Finance. In consultation with appropriate government agencies. The term "nongovernment organization" means a non profit domestic corporation: An amount set aside for a specific project which comes within one or. That any donation which is made to the Government or to any of its agencies or political subdivisions not in accordance with the said annual priority plan shall be subject to the limitations prescribed in paragraph 1 of this Subsection.

The election provided by paragraph 2 hereof may be made for any taxable year beginning after the effectivity of this Code. Contributions or gifts shall be allowable as deductions only if verified under the rules and regulations prescribed by the Secretary of Finance. In computing taxable income. I Research and Development. At the election of the taxpayer and in accordance with the rules and regulations to be prescribed by the Secretary of Finance. This Subsection shall not apply to: The method so elected.

The amount of any charitable contribution of property other than money shall be based on the acquisition cost of said property. The election shall not apply to any expenditure paid or incurred during any taxable year for which the taxpayer makes the election. The expenditures so treated shall be allowed as deduction during the taxable year when paid or incurred. L Optional Standard Deduction. That no ceilings shall further be imposed on items of expense already subject to ceilings under present law.

Any amount paid or payable which is otherwise deductible from. An employer establishing or maintaining a pension trust to provide for the payment of reasonable pensions to his employees shall be allowed as a deduction in addition to the contributions to such trust during the taxable year to cover the pension liability accruing during the year. Notwithstanding the provision of the preceding Subsections.

In lieu of the deductions allowed under the preceding Subsections.

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Unless the taxpayer signifies in his return his intention to elect the optional standard deduction. Allowance of Personal Exemption for Individual Taxpayer. That except when the Commissioner otherwise permits.

That an individual who is entitled to and claimed for the optional standard deduction shall not be required to submit with his tax return such financial statements otherwise required under this Code: For purposes of determining the tax provided in Section 24 A of this Title.

That for purposes of determining such ceilings or limitations. J Pension Trusts. That said family has a gross income of not more than Two hundred fifty thousand pesos P That in the case of married taxpayers. Such election when made in the return shall be irrevocable for the taxable year for which the return is made: If the spouse or any of the dependents dies or if any of such dependents marries.

There shall be allowed an additional exemption of Eight thousand pesos P8. In the case of legally separated spouses. B Additional Exemption for Dependents. If the taxpayer marries or should have additional dependent s as defined above during the taxable year. That the total amount of additional exemptions that may be claimed by both shall not exceed the maximum additional exemptions herein allowed. If the taxpayer dies during the taxable year. C Change of Status. For single individual or married individual judicially decreed as legally separated with no qualified dependents P For purposes of this paragraph.

The additional exemption for dependent shall be claimed by only one of the spouses in the case of married individuals. A nonresident alien individual engaged in trade. That the released reserve be treated as income for the year of release. In the case of mutual fire and mutual employers' liability and mutual workmen's compensation and mutual casualty insurance companies requiring their members to make premium deposits to provide for losses and expenses.

B Mutual Insurance Companies. Items Not Deductible. Whether Domestic or Foreign. This Subsection shall not apply to intangible drilling and development costs incurred in petroleum operations which are deductible under Subsection G 1 of Section 34 of this Code. B Losses from Sales or Exchanges of Property.

In the case of insurance companies. That said nonresident alien should file a true and accurate return of the total income received by him from all sources in the Philippines. In computing net income. As used in this Title - 1 Capital Assets.. The term "capital assets" means property held by the taxpayer whether or not connected with his trade or business.

Capital Gains and Losses. D Assessment Insurance Companies. Assessment insurance companies. C Mutual Marine Insurance Companies. B If the amount of stock or securities acquired or covered by the contract or option to acquire is less than the amount of stock or securities sold or otherwise disposed of. Losses from Wash Sales of Stock or Securities.

Mutual marine insurance companies shall include in their return of gross income. The term "net capital gain" means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges. C If the amount of stock or securities acquired or covered by the contract or option to acquire which resulted in the non-deductibility of the loss.

C Limitation on Capital Losses. Losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or exchanges. The term "net capital loss" means the excess of the losses from sales or exchanges of capital assets over the gains from such sales or exchanges. The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the basis or adjusted basis for determining gain.

E Retirement of Bonds. The amount realized from the sale or other disposition of property shall be the sum of money received plus the fair market value of the property other than money received.

B Percentage Taken Into Account. For purposes of this Title. Determination of Amount and Recognition of Gain or Loss. In the case of a taxpayer. The basis of property shall be - 1 The cost thereof in the case of property acquired on or after March 1. For purposes of this Title - 1 Gains or losses from short sales of property shall be considered as gains or losses from sales or exchanges of capital assets.

If a bank or trust company incorporated under the laws of the Philippines. If any taxpayer. D Net Capital Loss Carry-over.

C Exchange of Property. Except as herein provided. No gain or loss shall be recognized if in pursuance of a plan of merger or consolidation - a A corporation. That as to the shareholder. That stocks issued for services shall not be considered as issued in return for property. No gain or loss shall also be recognized if property is transferred to a corporation by a person in exchange for stock or unit of participation in such a corporation of which as a result of such exchange said person.

That the property received as "boot" shall have as basis its fair market value: That for a transaction to be regarded as a merger or consolidation within the purview of this Section. That in determining whether a bona fide business purpose exists. That if as part of the consideration to the transferor.

That if the transferor receives several kinds of stock or securities. That in determining whether the property transferred constitutes a substantial portion of the property of the. The amount received as dividends: That any change in an inventory valuation method must be subject to approval by the Secretary of Finance. Compensation for labor or personal services performed in the Philippines. Interests derived from sources within the Philippines.

If a taxpayer. Whenever in the judgment of the Commissioner. That the Commissioner shall not exercise his authority to require a change in inventory method more often than once every three 3 years: Income from Sources Within the Philippines. The following items of gross income shall be treated as gross income from sources within the Philippines: No deductions for interest paid or incurred abroad shall be allowed from the item of gross income specified in subsection A unless indebtedness was actually incurred to provide funds for use in connection with the conduct or operation of trade or business in the Philippines.

From the items of gross income specified in Subsection A of this Section. That such items of deductions shall be allowed only if fully substantiated by all the information necessary for its calculation. Rentals and royalties from property located in the Philippines or from any interest in such property. The remainder. The following items of gross income shall be treated as income from sources without the Philippines: Items of gross income.

In the case of gross income derived from sources partly within and partly without the Philippines. It shall be the duty of the transferor and the corporation the shares of which are sold or transferred. Where items of gross income are separately allocated to sources within the Philippines. As used in this Section the words "sale" or "sold" include "exchange" or "exchanged".

F Definitions. That gain from the sale of shares of stock in a domestic corporation shall be treated as derived entirely form sources within the Philippines regardless of where the said shares are sold. The transfer by a nonresident alien or a foreign corporation to anyone of any share of stock issued by a domestic corporation shall not be effected or made in its book unless: From the items of gross income specified in Subsection C of this Section there shall be deducted the expenses.

Where a separate final or adjustment return is made under Subsection A on account of a change in the accounting period. If the change is from one fiscal year to another fiscal year. If the taxpayer's annual accounting period is other than a fiscal year. Change of Accounting Period. General Rule. If the change is from calendar year to fiscal year. The deductions provided for in this Title shall be taken for the taxable year in which "paid or accrued" or "paid or incurred".

Period in which Items of Gross Income Included. In the case of the death of a taxpayer. Period for which Deductions and Credits Taken. The amount of all items of gross income shall be included in the gross income for the taxable year in which received by the taxpayer.

The taxable income shall be computed upon the basis of the taxpayer's annual accounting period fiscal year or calendar year. Installment Basis. D Change from Accrual to Installment Basis. Persons whose gross income is derived in whole or in part from such contracts shall report such income upon the basis of percentage of completion. The return should be accompanied by a return certificate of architects or engineers showing the percentage of completion during the taxable year of the entire work performed under contract.

In the case of two or more organizations. There should be deducted from such gross income all expenditures made during the taxable year on account of the contract. Allocation of Income and Deductions.

Accounting for Long-Term Contracts. If upon completion of a contract. If a taxpayer entitled to the benefits of Subsection A elects for any taxable year to report his taxable income on the installment basis.

Under rules and regulations prescribed by the Secretary of Finance. In the case 1 of a casual sale or other casual disposition of personal property other than property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year.

As used in this Section. As used herein. An individual who sells or disposes of real property. Income from long-term contracts shall be reported for tax purposes in the manner as provided in this Section. That an individual whose compensation income derived from sources within the Philippines exceeds Sixty thousand pesos P Individual Return. That an individual deriving compensation concurrently from two or more employers at any time during the taxable year shall file an income tax return: That a citizen of the Philippines and any alien individual engaged in business or practice of profession within the Philippine shall file an income tax return.

B Taxable Year of Corporation. Corporation Returns. Married individuals. The fact that an individual's name is signed to a filed return shall be prima facie evidence for all purposes that the return was actually signed by him.

If the taxpayer is unable to make his own return. Except in cases where the Commissioner otherwise permits. Collection Agent or duly authorized Treasurer of the city or municipality in which such person has his legal residence or principal place of business in the Philippines. C When to File. A corporation may employ either calendar year or fiscal year as a basis for filing its annual income tax return: The return shall be filed by the president.

D Husband and Wife. The income of unmarried minors derived from properly received from a living parent shall be included in the return of the parent.

Revenue District Officer. Every corporation subject to the tax herein imposed. B Where to File. G Signature Presumed Correct. F Persons Under Disability. That the corporation shall not change the. Returns of Receivers. Every corporation shall. Every corporation deriving capital gains from the sale or exchange of shares of stock not traded thru a local stock exchange as prescribed under Sections 24 c. Extension of Time to File Returns. Returns of General Professional Partnerships.

Trustees in Bankruptcy or Assignees. The total amount of tax imposed by this Title shall be paid by the person subject thereto at the time the return is filed. In cases wherein receivers. The dissolving or reorganizing corporation shall. Upon failure of the said agents or captains to file the return and. In the case of tramp vessels.

The Tax Code of the Philippines (National Internal Revenue Code of 1997)

Every general professional partnership shall file. B Assessment and Payment of Deficiency Tax. In case the taxpayer elects and is qualified to report the gain by installments under Section 49 of this Code. That if the seller submits proof of his intention to avail himself of the benefit of exemption of capital gains under existing special laws. That if the seller. The total amount of tax imposed and prescribed under Section 24 c. As used in this Chapter. After the return is filed. That in case of failure to qualify for exemption under such special laws and implementing rules and regulations.

If any installment is not paid on or before the date fixed for its payment. No registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner or his duly authorized representative has certified that such transfer has been reported. When the tax due is in excess of Two thousand pesos P2.

The tax or deficiency income tax so discovered shall be paid upon notice and demand from the Commissioner. Taxes deducted and withheld under Section 57 by withholding agents shall be covered by a return and paid to.

Returns and Payment of Taxes Withheld at Source. The Secretary of Finance may. In any case where bonds. Every withholding agent required to deduct and withhold taxes under Section 57 shall furnish each recipient. The taxes deducted and withheld by the withholding agent shall be held as a special fund in trust for the government until paid to the collecting officers.

C Tax-free Covenant Bonds. Withholding of Tax at Source. B Withholding of Creditable Tax at Source. The return for final withholding tax shall be filed and the payment made within twenty-five 25 days from the close of each calendar quarter. Subject to rules and regulations the Secretary of Finance may promulgate. That the Commissioner. D Income of Recipient.

That in cases of transfer of property to a corporation. E Registration with Register of Deeds. All taxes withheld pursuant to the provisions of this Code and its implementing rules and regulations are hereby considered trust funds and shall be maintained in a separate account and not commingled with any other funds of the withholding agent.

The tax imposed under this Title upon gains. Income upon which any creditable tax is required to be withheld at source under Section 57 shall be included in the return of its recipient but the excess of the amount of tax so withheld over the tax due on his return shall be refunded to him subject to the provisions of Section In the case of final withholding taxes.

That any violation of this provision by the Register of Deeds shall be subject to the penalties imposed under Section of this Code. This return. That the information as may be required by rules and regulations to be prescribed by the Secretary of Finance. Every withholding agent required to deduct and withhold taxes under Section 57 shall submit to the Commissioner an annual information return containing the list of payees and income payments.

The intent and purpose of the Title is that all gains. For final withholding taxes. C Annual Information Return. B Exception. Imposition of Tax. That any amount actually distributed to any employee or distributee shall be taxable to him in the year in which so distributed to the extent that it exceeds the amount contributed by such employee or distributee.

C Computation and Payment. The tax imposed by this Title shall not apply to employee's trust which forms part of a pension. The tax shall be computed upon the taxable income of the estate or trust and shall be paid by the fiduciary. Taxable Income. The tax imposed by this Title upon individuals shall apply to the income of estates or of any kind of property held in trust. The taxable income of the estate or trust shall be computed in the same manner and on the same basis as in the case of an individual.

B In the case of income received by estates of deceased persons during the period of administration or settlement of the estate. Any amount allowed as a deduction under this Subsection shall not be allowed as a deduction under Subsection B of this Section in the same or any succeeding taxable year. Where at any time the power to revest in the grantor title to any part of the corpus of the trust is vested 1 in the grantor either alone or in conjunction with any person not having a substantial adverse interest in the disposition of such part of the corpus or the income therefrom.

Exemption Allowed to Estates and Trusts. Fiduciary Returns. A There shall be allowed as a deduction in computing the taxable income of the estate or trust the amount of the income of the estate or trust for the taxable year which is to be distributed currently by the fiduciary to the beneficiaries. C In the case of a trust administered in a foreign country.

That the amount of any income included in the return of said trust shall not be included in computing the income of the beneficiaries. Income for Benefit of Grantor. For the purpose of the tax provided for in this Title. B As used in this Section.

Philippines pdf nirc

Revocable Trusts. Collection of Foreign Payments. Every person. Such fiduciary or person filing the return for him or it. That a return made by or for one or two or more joint fiduciaries filed in the province where such fiduciaries reside.

Return of Information of Brokers. All persons. That such returns shall be required.

Pdf nirc philippines

Information at Source as to Income Payments. Nothing in this Section shall be construed to require the divulging of privileged communications between attorney and client. Publication of Lists of Taxpayers and Filers.

Such return shall be in such form and shall set forth. The term "dividends" when used in this Title means any distribution made by a corporation to its shareholders out of its earnings or profits and payable to its shareholders.

Disposition of Income Tax Returns. B Form and Contents of Return. After the assessment shall have been made. Distribution of dividends or Assets by Corporations. Under rules and regulations prescribed by the Secretary of finance. Where a corporation distributes all of its assets in complete liquidation or dissolution. When an assessment is made in case of any list. Returns of Foreign Corporations. The declaration shall contain such pertinent information as the Secretary of Finance.

B Stock Dividend. Lessee shall automatically deduct from its lease payments the VAT due? Hello, are the services rendered by licensed professionals? Under Section of the Tax Code, as amended, medical, dental, hospital and veterinary services rendered by non professionals are exempted from VAT.

However, please confirm with the BIR and ask them a ruling to make sure your lying-in center is subject to exemption or not. Good day! Please reply thanks!! Your email address will not be published.

Please answer question below before you submit comment. Thank you. Comments Are parents no longer dependents of a taxpayer under the revenue code? No they cannot be declared as dependent anymore.

Is there a listing of all latest revenue regulations and bir rulings? Hi, Is the lying in center are exempted from VAT and percentage tax? Leave a Reply Cancel reply Your email address will not be published. This website uses cookies to improve your experience and to personalise content and adverts, to provide social media features and to analyse traffic.

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