nirc rbsi salao
TRANSCRIPT
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THENATIONAL INTERNAL
REVENUE CODEOF THE PHILIPPINES
(Pres. Decree No. 1158 as amendedup to Rep. Act No. 9504)
By
RBSI Editorial Staff
Ernesto C. Salao, [email protected]
2009
Third Edition
with:• An Act Creating the Court of Tax Appeals, as
amended• Revised Rules of the Court of Tax Appeals, as
amended• Attrition Act of 2005
• Republic Act No. 9480• Revenue Regulations No. 10-2008
Book Store856 Nicanor Reyes, Sr. St.
Tel. Nos.: 735-1364 • 736-05671977 C.M. Recto Avenue
Tel. Nos.: 735-5527 • 735-5534Manila, Philippines
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Philippine Copyright, 2009
by
REX BOOK STORE, INC.
ISBN 978-971-23-5278-2
Any copy of this book without the corresponding number and signature of Atty. Ernesto C. Salao on this page either proceeds from an illegitimate source or is in possession of one who has no authority to dispose of the same.
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TABLE OF CONTENTS
TITLE I – ORGANIZATION AND FUNCTION OF THE BUREAU OF INTERNAL REVENUE
Section 1. Title of the Code ............................................ 1Section 2. Powers and Duties of the Bureau of Internal Revenue ............................... 1Section 3. Chief officials of the Bureau of Internal Revenue ............................................... 2Section 4. Power of the Commissioner to interpret tax laws and to decide tax cases ........ 2Section 5. Power of the Commissioner to obtain information, and to summon/ examine, and take testimony of persons ............................................. 3Section 6. Power of the Commissioner to make assessments and prescribe additional requirements for tax administration and enforcement .................................. 4Section 7. Authority of the Commissioner to delegate power ................................................... 9Section 8. Duty of the commissioner to ensure the provision and distribution of forms, receipts, certificates, and appliances, and the acknowledgment of payment of taxes ................................................. 10Section 9. Internal Revenue Districts ........................... 11Section 10. Revenue Regional Director ......................... 11Section 11. Duties of Revenue District Officers and Other Internal Revenue Officers ........ 12Section 12. Agents and deputies for collection of National Internal Revenue Taxes .................................................... 13
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Section 13. Authority of a Revenue Officer .................. 14Section 14. Authority of officers to administer Oaths and take testimony .................. 14Section 15. Authority of internal revenue officers to make arrests and seizures .............. 14Section 16. Assignment of Internal Revenue Officers involved in excise tax functions to establishments where articles subject to excise tax are produced or kept .................................................. 15Section 17. Assignment of Internal Revenue Officers and other employees to other duties ..................................... 15Section 18. Reports of violation of laws ........................ 16Section 19. Contents of commissioner’s annual report ................................................... 16Section 20. Submission of report and pertinent information by the commissioner ....... 16Section 21. Sources of revenue ...................................... 17
TITLE II – TAX ON INCOME
Chapter I – DEFINITIONS
Section 22. Definitions ................................................... 19
Chapter II – GENERAL PRINCIPLES
Section 23. General principles of income taxation in the Philippines ............................... 28
Chapter III – TAX ON INDIVIDUALS
Section 24. Income tax rates ........................................ 30Section 25. Tax on nonresident alien individual ......... 35Section 26. Tax liability of members of General Professional Partnerships ................. 40
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Chapter IV – TAX ON CORPORATIONS
Section 27. Rates of income tax on domestic corporations ........................................ 41Section 28. Rates of income tax on foreign corporations ......................................... 48Section 29. Imposition of improperly accumulated earnings tax ......................................... 56Section 30. Exemptions from tax on corporations ........ 58 Chapter V – COMPUTATION OF TAXABLE INCOME
Section 31. Taxable Income defined ............................. 61
Chapter VI – COMPUTATION OF GROSS INCOME
Section 32. Gross income ............................................... 62Section 33. Special treatment of fringe benefit ........... 67
Chapter VII – ALLOWABLE DEDUCTIONS
Section 34. Deductions from gross income .................. 71Section 35. Allowance of personal exemption for individual taxpayer ............................ 97Section 36. Items not deductible .................................. 99Section 37. Special provisions regarding income and deductions of insurance companies, whether domestic or foreign .............. 101Section 38. Losses from wash sales of stock or securities ............................................. 102Section 39. Capital gains and losses ............................ 103Section 40. Determination of amount and recognition of gain or loss ................... 106Section 41. Inventories ................................................. 112Section 42. Income from sources within the Philippines .......................................... 113
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Chapter VIII – ACCOUNTING PERIODS AND METHODS OF ACCOUNTING
Section 43. General rule ............................................... 119Section 44. Period in which items of gross income included ............................................... 119Section 45. Period for which deductions and credits taken ................................................... 120Section 46. Change of accounting period ...................... 120Section 47. Final or adjustment returns for a period of less than twelve (12) months .......... 120Section 48. Accounting for long-term contracts ............ 121Section 49. Installment basis ........................................ 122Section 50. Allocation of income and deductions ......... 123
Chapter IX – RETURNS AND PAYMENT OF TAX
Section 51. Individual returns ...................................... 125Section 52. Corporation returns ................................... 129Section 53. Extension of time to file returns ............... 130Section 54. Returns of receivers, trustees in bankruptcy or assignees ..................... 130Section 55. Returns of General Professional Partnerships ........................................ 131Section 56. Payment and assessment of income tax for individuals and corporations ........ 131Section 57. Withholding of tax at source ..................... 134Section 58. Returns and payment of taxes withheld at source .............................................. 135Section 59. Tax on profits collectible from owner or other persons ................................... 138
Chapter X – ESTATES AND TRUSTS
Section 60. Imposition of tax ......................................... 140
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Section 61. Taxable income .......................................... 142Section 62. Exemption allowed to estates and trusts .. 143Section 63. Revocable trusts .......................................... 143Section 64. Income for benefit of grantor ...................... 143Section 65. Fiduciary returns ....................................... 144Section 66. Fiduciaries indemnified against claims for taxes paid ....................................... 145
Chapter XI – OTHER INCOME TAX REQUIREMENTS
Section 67. Collection of foreign payments .................. 146Section 68. Information at source as to income payments ............................................ 146Section 69. Return of information of brokers .............. 147Section 70. Returns of foreign corporations ................. 148Section 71. Disposition of income tax returns, publication of lists of taxpayers and filers ............................................. 149Section 72. Suit to recover tax based on false or fraudulent returns ............................. 149Section 73. Distribution of dividends or assets by corporations ........................................ 149
Chapter XII – QUARTERLY CORPORATE INCOME TAX
ANNUAL DECLARATION AND QUARTERLY PAY-MENTS OF INCOME TAXES
Section 74. Declaration of income tax for individuals .. 152Section 75. Declaration of quarterly corporate income tax .......................................... 153Section 76. Fiscal adjustment return ........................... 154Section 77. Place and time of filing and payment of quarterly corporate income tax ..... 155
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Chapter XIII – WITHHOLDING ON WAGES
Section 78. Definitions .................................................. 156Section 79. Income tax collected at source ................... 158Section 80. Liability for tax ........................................... 162Section 81. Filing of return and payment of taxes withheld .............................................. 162Section 82. Return and payment in cases of government employees ...................... 163Section 83. Statements and returns ............................ 163
TITLE III – ESTATE AND DONOR’S TAXES
Chapter I – ESTATE TAX
Section 84. Rates of Estate Tax .................................... 166Section 85. Gross estate ................................................. 166Section 86. Computation of net estate .......................... 170Section 87. Exemption of certain acquisitions and transmissions .............................. 178Section 88. Determination of the value of the estate .. 178Section 89. Notice of death to be filed .......................... 179Section 90. Estate tax returns ...................................... 179Section 91. Payment of tax ........................................... 181Section 92. Discharge of executor or administrator from personal liability ........................ 183Section 93. Definition of deficiency .............................. 183Section 94. Payment before delivery by executor or administrator ...................................... 184Section 95. Duties of certain officers and debtors ....... 184Section 96. Restitution of tax upon satisfaction of outstanding obligations ..................... 185Section 97. Payment of tax antecedent to the transfer of shares, bonds or rights ................... 185
Chapter II – DONOR’S TAX
Section 98. Imposition of tax ........................................ 187
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Section 99. Rates of tax payable by donor .................... 187Section 100. Transfer for less than adequate and full consideration ........................ 188Section 101. Exemption of certain gifts ....................... 188Section 102. Valuation of gifts made in property ........ 190Section 103. Filing of return and payment of tax ........ 191Section 104. Definitions ................................................ 192
TITLE IV – VALUE-ADDED TAX
Chapter I – IMPOSITION OF TAX
Section 105. Persons liable ........................................... 194Section 106. Value-added tax on sale of goods or properties ........................................... 195Section 107. Value-added tax on importation of goods ................................................... 199Section 108. Value-added tax on sale of services and use or lease of properties ................... 200Section 109. Exempt transactions ................................ 205Section 110. Tax credits ................................................ 209Section 111. Transitional/Presumptive input tax credits .................................................. 212Section 112. Refunds or tax credits of input tax ......... 213
Chapter II – COMPLIANCE REQUIREMENTS
Section 113. Invoicing and accounting requirements for VAT-Registered Persons .............. 216Section 114. Return and payment of value-added tax ........................................................ 219Section 115. Power of the commissioner to suspend the business operations of a taxpayer ........................................ 220
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TITLE V – OTHER PERCENTAGE TAXES
Section 116. Tax on persons exempt from value- added tax ............................................. 222Section 117. Percentage tax on domestic carriers and keepers of garages ...................... 222Section 118. Percentage tax on international carriers ................................................ 223Section 119. Tax on franchises ..................................... 223Section 120. Tax on overseas dispatch, message or conversation originating from the Philippines ........................................... 224Section 121. Tax on banks and non-bank financial intermediaries performing quasi-banking functions .................... 225Section 122. Tax on other non-bank finance intermediaries .................................... 227Section 123. Tax on life insurance premiums ............. 228Section 124. Tax on agents of foreign insurance companies ........................................... 229Section 125. Amusement taxes .................................... 229Section 126. Tax on winnings ....................................... 231Section 127. Tax on sale, barter or exchange of shares of stock listed and traded through the local stock exchange or through initial public offering ....... 232Section 128. Returns and payments of percentage taxes ..................................................... 235
TITLE VI – EXCISE TAXES ON CERTAIN GOODS
Chapter I – GENERAL PROVISIONS
Section 129. Goods subject to excise taxes ................... 238Section 130. Filing of return and payment of excise tax on domestic products .................... 238
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Section 131. Payment of excise taxes on imported articles ................................................ 242Section 132. Mode of computing contents of cask or package ........................................... 245
Chapter II – EXEMPTION OR CONDITIONAL TAX-FREE REMOVAL OF CERTAIN ARTICLES
Section 133. Removal of wines and distilled spirits for treatment of tobacco leaf ............... 246Section 134. Domestic denatured alcohol ..................... 246Section 135. Petroleum products sold to international carriers and exempt entities or agencies .......................................... 247Section 136. Denaturation, withdrawal and use of denatured alcohol ................................ 247Section 137. Removal of spirits under bond for rectification ......................................... 248Section 138. Removal of fermented liquors to bonded warehouse ........................................... 248Section 139. Removal of damaged liquors free of tax ... 249Section 140. Removal of tobacco products without prepayment of tax ............................... 249
Chapter III – EXCISE TAX ON ALCOHOL PRODUCTS
Section 141. Distilled spirits ........................................ 251Section 142. Wines ........................................................ 256Section 143. Fermented liquor ...................................... 260
Chapter IV – EXCISE TAX ON TOBACCO PRODUCTS
Section 144. Tobacco products ...................................... 265Section 145. Cigars and cigarettes ............................... 267Section 146. Inspection fees ........................................... 273Section 147. Definition of terms .................................... 274
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Chapter V – EXCISE TAX ON PETROLEUM PRODUCTS
Section 148. Manufactured oils and other fuels ........... 275
Chapter VI – EXCISE TAX ON MISCELLANEOUS ARTICLES
Section 149. Automobiles .............................................. 279Section 150. Non-essential goods ................................. 282
Chapter VII – EXCISE TAX ON MINERAL PRODUCTS
Section 151. Mineral products ...................................... 283
Chapter VIII – ADMINISTRATIVE PROVISIONS REGULATING BUSINESS OF PERSONS DEALING IN ARTICLES SUBJECT TO EXCISE TAX
Section 152. Extent of supervision over establishments producing taxable output .................................................. 287Section 153. Records to be kept by manufacturers; assessment based thereon .................. 287Section 154. Premises subject to approval by commissioner ....................................... 288Section 155. Manufacturers to provide themselves with counting or metering devices to determine production .................... 288Section 156. Labels and form of packages ................... 289Section 157. Removal of articles after the payment of tax .................................................... 289Section 158. Storage of goods in internal-revenue bonded warehouses ............................ 289Section 159. Proof of exportation; exporter’s bond ...... 290
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Section 160. Manufacturers’ and importers’ bond ...... 290Section 161. Records to be kept by wholesale dealers ................................................ 291Section 162. Records to be kept by dealers in leaf tobacco ................................................. 291Section 163. Preservation of invoices and stamps ...... 291Section 164. Information to be given by Manufacturers, importers, indentors, and wholesalers of any apparatus or mechanical contrivance specially for the manufacture of articles subject to excise tax and importers, indentors, manufacturers or sellers of cigarette paper in bobbins, cigarette tipping paper or cigarette filter tips .............................................. 291Section 165. Establishment of distillery warehouse .... 292Section 166. Custody of distillery or distillery warehouse ............................................ 293Section 167. Limitation on quantity of spirits removed from warehouse ................... 293Section 168. Denaturing within premises ................... 293Section 169. Recovery of alcohol for use in arts and industries ............................................. 294Section 170. Requirements governing rectification and compounding of liquors ............... 294Section 171. Authority of internal revenue officer in searching for taxable articles ............ 294Section 172. Detention of package containing taxable articles ................................................. 295
TITLE VII – DOCUMENTARY STAMP TAX
Section 173. Stamp taxes upon documents, loan agreements, instruments and papers ........................................... 296
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Section 174. Stamp tax on original issue of shares of stock .................................... 296Section 175. Stamp tax on sales, agreements to sell, memoranda of sales, deliveries or transfer of due-bills, certificates of obligation, or shares or certificates of stock ................................................ 297Section 176. Stamp tax on bonds, debentures, certificates of stock or indebtedness issued in foreign countries ................. 298Section 177. Stamp tax on certificates of profits or interest in property or accumulations .................................... 298Section 178. Stamp tax on bank checks, drafts, certificates of deposit not bearing interest, and other instruments ........ 298Section 179. Stamp tax on all debt instruments ......... 298 Section 180. Stamp tax on all bills of exchange or drafts .............................................. 299Section 181. Stamp tax upon acceptance of bills of exchange and others .......................... 300Section 182. Stamp tax on foreign bills of exchange and letters of credit ............................. 300Section 183. Stamp tax on life insurance policies ....... 300Section 184. Stamp tax on policies of insurance upon property .............................................. 301Section 185. Stamp tax on fidelity bonds and other insurance policies ............................... 301Section 186. Stamp tax on policies of annuities and pre-need plans ..................................... 302Section 187. Stamp tax on indemnity bonds ............... 302Section 188. Stamp tax on certificates ......................... 303Section 189. Stamp tax on warehouse receipts ........... 303Section 190. Stamp tax on jai-alai, horse race tickets, lotto, or other authorized numbers games .................................. 303
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Section 191. Stamp tax on bills of lading or receipts .............................................. 304Section 192. Stamp tax on proxies ............................... 304Section 193. Stamp tax on powers of attorney ............. 304Section 194. Stamp tax on leases and other hiring agreements .......................................... 304 Section 195. Stamp tax on mortgages, pledges, and deeds of trust ...................................... 305Section 196. Stamp tax on deeds of sale and conveyances of real property ............. 306Section 197. Stamp tax on charter parties and similar instruments ........................... 307Section 198. Stamp tax on assignments and renewals of certain instruments ....................... 308Section 199. Documents and papers not subject to stamp tax ............................................ 308Section 200. Payment of documentary stamp tax ....... 312Section 201. Effect of failure to stamp taxable document ............................................ 313
TITLE VIII – REMEDIES
Chapter I – REMEDIES IN GENERAL
Section 202. Final deed to purchaser ............................ 314Section 203. Period of limitation upon assessment and collection ...................................... 314Section 204. Authority of the commissioner to compromise, abate, and refund or credit taxes ......................................... 315
Chapter II – CIVIL REMEDIES FOR COLLECTION OF TAXES
Section 205. Remedies for the collection of delinquent taxes ................................. 318
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Section 206. Constructive distraint of the property of a taxpayer ....................................... 319Section 207. Summary remedies .................................. 320Section 208. Procedure for distraint and garnishment ....................................... 322Section 209. Sale of property distrained and disposition of proceeds ....................... 323Section 210. Release of distrained property upon payment prior to sale ......................... 324Section 211. Report of sale to Bureau of Internal Revenue ............................................... 324Section 212. Purchase by government at sale upon distraint .............................................. 325Section 213. Advertisement and sale ........................... 325Section 214. Redemption of property sold .................... 327Section 215. Forfeiture to government for want of bidder .............................................. 327Section 216. Resale of real estate taken for taxes ....... 328Section 217. Further distraint or levy .......................... 328Section 218. Injunction not available to restrain collection of tax ................................... 329Section 219. Nature and extent of tax lien ................... 329Section 220. Form and mode of proceeding in actions arising under this code ........... 329Section 221. Remedy for enforcement of statutory penal provisions .................................. 330Section 222. Exceptions as to period of limitation of assessment and collection of taxes ................................................ 330Section 223. Suspension of running of statute of limitations .......................................... 331Section 224. Remedy for enforcement of forfeitures ... 332Section 225. When property to be sold or destroyed ... 332Section 226. Disposition of funds recovered in legal proceedings or obtained from forfeitures ........................................... 333
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Section 227. Satisfaction of judgment recovered against any internal revenue officer .................................................. 333
Chapter III – PROTESTING AN ASSESSMENT, REFUND, ETC.
Section 228. Protesting of assessment ......................... 334Section 229. Recovery of tax erroneously or illegally collected ........................... 335Section 230. Forfeiture of cash refund and of tax credit .................................................... 336Section 231. Action to contest forfeitures of chattel .... 337
TITLE IX – COMPLIANCE REQUIREMENTS
Chapter I – KEEPING OF BOOKS OF ACCOUNTS AND RECORDS
Section 232. Keeping of books of accounts ................... 338Section 233. Subsidiary books ...................................... 339Section 234. Language in which books are to be kept; translation ................................. 339Section 235. Preservation of books of accounts and other accounting records .................... 340
Chapter II – ADMINISTRATIVE PROVISIONS
Section 236. Registration requirements ....................... 342Section 237. Issuance of receipts or sales or commercial invoices ........................... 347Section 238. Printing of receipts or sales or commercial invoices ............................ 348Section 239. Sign to be exhibited by distiller, rectifier, compounder, repacker, and wholesale liquor dealer ............... 349
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Section 240. Sign to be exhibited by manufacturer of products of tobacco ......................... 350Section 241. Exhibition of certificate of payment at place of business ................................. 350Section 242. Continuation of business of deceased person ................................................. 350Section 243. Removal of business to other location .... 351
Chapter III – RULES AND REGULATIONS
Section 244. Authority of secretary of finance to promulgate rules and regulations ..... 352Section 245. Specific provisions to be contained in rules and regulations ......................... 352Section 246. Non-retroactivity of rulings ..................... 356
TITLE X – STATUTORY OFFENSES ANDPENALTIES
Chapter I – ADDITIONS TO THE TAX
Section 247. General provisions .................................... 357Section 248. Civil penalties .......................................... 357Section 249. Interest ..................................................... 359Section 250. Failure to file certain information returns ................................................. 360Section 251. Failure of a withholding agent to collect and remit tax ........................... 360Section 252. Failure of a withholding agent to refund excess withholding tax ....................... 361
Chapter II – CRIMES, OTHER OFFENSES AND FORFEITURES
Section 253. General provisions ................................... 362Section 254. Attempt to evade or defeat tax ................. 363
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Section 255. Failure to file return, supply correct and accurate information, pay tax, withhold and remit tax and refund excess taxes withheld on compensation ...................................... 363Section 256. Penal liability of corporations ................. 364Section 257. Penal liability for making false entries, records or reports, or using falsified or fake accountable forms .................. 364Section 258. Unlawful pursuit of business ................... 367Section 259. Illegal collection of foreign payments ..... 367Section 260. Unlawful possession of cigarette paper in bobbins or rolls, etc. ............ 367Section 261. Unlawful use of denatured alcohol ......... 368Section 262. Shipment or removal of liquor or tobacco products under false name or brand or as an imitation of any existing or otherwise known product name or brand .................................... 369Section 263. Unlawful possession or removal of articles subject to excise tax without payment of the tax ............................. 369Section 264. Failure or refusal to issue receipts or sales or commercial invoices, violations related to the printing of such receipts or invoices and other violations ........................... 371Section 265. Offenses relating to stamps ..................... 372Section 266. Failure to obey summons ........................ 373Section 267. Declaration under penalties of perjury ... 374Section 268. Other crimes and offenses ....................... 374
Chapter III – PENALTIES IMPOSED ON PUBLIC OFFICERS
Section 269. Violations committed by government enforcement officers ........................... 376
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Section 270. Unlawful divulgence of trade secrets ................................................. 378Section 271. Unlawful interest of revenue law enforcers in business ........................... 379Section 272. Violation of withholding tax provision ............................................. 379Section 273. Penalty for failure to issue and execute warrant ............................................... 380
Chapter IV – OTHER PENAL PROVISIONS
Section 274. Penalty for second and subsequent offenses ............................................... 381Section 275. Violation of other provisions of this code or rules and regulations in general ............................................ 381Section 276. Penalty for selling, transferring, encumbering or in any way disposing of property placed under constructive distraint ............... 381Section 277. Failure to surrender property placed under distraint and levy ..................... 382Section 278. Procuring unlawful divulgence of trade secrets ........................................ 382Section 279. Confiscation and forfeiture of the proceeds or instruments of crime ............................................... 383Section 280. Subsidiary penalty ................................... 384Section 281. Prescription for violations of any provision of this code ........................... 384Section 282. Informer’s reward to persons instrumental in the discovery of violations of the National Internal Revenue Code and in the discovery and seizure of smuggled goods .......... 384
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TITLE XI – ALLOTMENT OF INTERNAL REVENUE
Chapter I – DISPOSITION AND ALLOTMENT OF NATIONAL INTERNAL REVENUE IN GENERAL
Section 283. Disposition of national internal revenue ................................................ 387Section 284. Allotment for the Commission on Audit ................................................... 388Section 285. Allotment for the Bureau of Internal Revenue .............................................. 388
Chapter II – SPECIAL DISPOSITION OF CERTAIN NATIONAL INTERNAL REVENUE TAXES
Section 286. Disposition of proceeds of insurance premium tax ........................................ 390Section 287. Shares of local government units in the proceeds from the development and utilization of the national wealth ...... 390Section 288. Disposition of incremental revenues ...... 392Section 289. Special Financial support to beneficiary provinces producing virginia tobacco .................................. 396
TITLE XII – OVERSIGHT COMMITTEE
Section 290. Congressional oversight committee ........ 399
TITLE XIII – REPEALING PROVISIONS
Section 291. In general ................................................. 401
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TITLE XIV – FINAL PROVISIONS
Section 292. Separability clause .................................. 402
OTHER PROVISIONS OF REPUBLIC ACT NO. 8424
Section 2. State policy .................................................... 403Section 4. ....................................................................... 403Section 5. Transitory Provisions. – Deferment of the Effectivity of the Imposition of VAT on certain services ............................... 403Section 6. Separability clause ...................................... 404Section 7. Repealing clauses ......................................... 404Section 8. Effectivity ..................................................... 404
ANNEXES
Annex “A-1” – Local Distilled Spirits Brands Produced from Sap of Nipa, Coconut, etc. covered by Section 141(b) ............ 405
Annex “A-2” – Local Distilled Spirits Brands Produced from Sap of Nipa, Coconut, etc. covered by Section 141(b) ............ 406
Annex “A-3” – Distilled Spirits Brands Produced from Grains, Cereals, and Grains covered by Section 141(b) .................. 407
Annex “A-4” – Distilled Spirits Brands Produced from Grains, Cereals, and Grains covered by Section 141(b) .................. 409
Annex “B” – .............................................................. 410Annex “C-1” – .............................................................. 411Annex “C-2” – .............................................................. 413Annex “D” – Tax on Cigar and Cigarettes ............. 416
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APPENDICES
APPENDIX A
AN ACT CREATING THE COURT OF TAX APPEALS
(R.A. No. 1125, as amended by R.A. No. 3457 and further amended by R.A. No. 9282
and R.A. 9503)
Section 1. Court; justices; qualifications; salary; tenure .................................................. 418Section 2. Sitting en banc or Division; Quorum; proceedings .......................................... 419Section 3. Clerk of court; Division of Clerks of Court; appointment; qualification; compensation ...................................... 420Section 4. Other subordinate employees ..................... 421Section 5. Disqualifications .......................................... 421Section 6. Place of office ................................................ 421Section 7. Jurisdiction .................................................. 421Section 8. Court of record; seal; proceedings ............... 424Section 9. Fees ............................................................... 424Section 10. Power to administer oaths, issue subpoena, punish for contempt .......... 425Section 11. Who may appeal; mode of appeal; effect of appeal .............................................. 425Section 12. Taking of evidence ..................................... 427Section 13. Decision, maximum period for termination of cases ................................................ 427Section 14. Effect of decision that tax is barred by statute of limitations ......................... 428Section 15. Publicity of proceedings and publication of decisions .......................................... 428Section 16. Damages ...................................................... 429Section 17. Violation of penal law ................................. 429Section 18. Appeal to the Court of Appeals en banc .... 429
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Section 19. Review by certiorari ................................... 430Section 20. Appropriation ............................................. 430Section 21. General provisions ..................................... 430Section 22. Pending cases to be remanded to court .... 431Section 23. Separability clause ..................................... 431Section 24. Effectivity .................................................... 431
OTHER PROVISIONS OF REPUBLIC ACT 9282
Section 13. Distraint of personal property and/or levy on real property ........................... 432Section 14. Retention of personnel; security of tenure; upgrading of positions and salaries ... 432Section 15. Transitory provisions ................................. 432Section 16. Appropriations ........................................... 433Section 17. Repealing Clause ....................................... 433Section 18. Separability Clause ................................... 433Section 19. Effectivity Clause ....................................... 433
APPENDIX B
Revised Rules of the Court of Tax Appeals
Rule 1 – Title and Construction
Section 1. Title of the rules ........................................... 434Section 2. Liberal construction ..................................... 434Section 3. Applicability of the rules of court ................ 435
Rule 2 – The Court, its Organization and Functions
Section 1. Composition of the Court ............................. 435Section 2. Exercise of powers and functions ................ 435Section 3. Court en banc; quorum and voting ............. 435Section 4. The court divisions; quorum and voting ..... 436
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Section 5. Hearings ....................................................... 436Section 6. Disqualification of justices .......................... 436Section 7. Motion to inhibit a justice ............................ 437
Rule 3 – Place of Office, Seal and Office Hours
Section 1. Place of office ................................................ 438Section 2. Court seal ..................................................... 438Section 3. Seal, where affixed ....................................... 439Section 4. Office hours .................................................. 439
Rule 4 – Jurisdiction of the Court
Section 1. Jurisdiction of the court .............................. 439Section 2. Cases within the jurisdiction of the Court en banc ................................................ 439Section 3. Cases within the jurisdiction of the Court in Divisions ......................................... 441
Rule 5 – Form and Style of Papers
Section 1. Style ........................................................ 446Section 2. Size and specifications ................................. 446Section 3. Citations ....................................................... 446Section 4. Number of copies .......................................... 446Section 5. Clear and legible copies ............................... 447
Rule 6 – Pleadings Filed with the Court
Section 1. Complaint; contents ..................................... 447Section 2. Petition for review; contents ....................... 447Section 3. Payment of docket fees ................................ 447Section 4. Bill of particulars ......................................... 448Section 5. Answer ........................................................ 449Section 6. Entry of appearance .................................... 450
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Rule 7 – Procedure in the Court of Tax Appeals
Section 1. Applicability of the Rules of the Court of Appeals, exception ......................... 451
Rule 8 – Procedure in Civil Cases
Section 1. Review of cases in the court en banc .......... 451Section 2. Review of cases in the court in division ...... 451Section 3. Who may appeal; period to file petition ...... 452Section 4. Where to appeal; mode of appeal ................ 453
Rule 9 – Procedure in Criminal Cases
Section 1. Review of cases in the court ........................ 454Section 2. Institution of criminal actions ..................... 454Section 3. Prosecution of criminal actions ................... 455Section 4. Warrant of arrest ......................................... 455Section 5. When search warrant may issue ................. 455Section 6. Bail, how amount fixed; approval ............... 456Section 7. Conditions of the bail ................................... 456Section 8. Release order ................................................ 456Section 9. Appeal; period to appeal .............................. 456Section 10. Solicitor general as counsel for the people and government officials sued in their official capacity ............. 457Section 11. Inclusion of civil action in criminal action .................................................. 458
Rule 10 – Suspension of Collection Tax
Section 1. No suspension of collection of tax, except as herein prescribed ........................... 458Section 2. Who may file ................................................. 458Section 3. When to file ................................................. 459
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Section 4. Contents and attachments of the motion ....................................... 459Section 5. Opposition .................................................... 459Section 6. Hearing of the motion .................................. 459Section 7. Corporate surety bonds ............................... 460
Rule 11 – Pre-Trial
Section 1. Applicability ................................................. 460Section 2. Mandatory pre-trial ..................................... 461Section 3. Setting for an earlier date ........................... 461Section 4. Duty of the court .......................................... 461Section 5. Procedure in civil cases ............................... 461Section 6. Procedure in Criminal Cases ...................... 462
Rule 12 – Trial
Section 1. Procedure ..................................................... 465Section 2. Power of the court to receive evidence ........ 465Section 3. Taking of evidence by a justice ................... 466Section 4. Taking of evidence by court official ............. 466Section 5. Presentation of voluminous documents or long accounts .................................. 467
Rule 13 – Trial by Commissioner
Section 1. Appointment of independent Certified Public Accountant (CPA) ................... 468Section 2. Duties of independent CPA ......................... 469Section 3. Findings of independent CPA ..................... 469Section 4. Other referral to commissioner ................... 470Section 5. Compensation of commissioner ................... 470
Rule 14 – Judgment, its Entry and Execution
Section 1. Rendition of judgment ................................. 470
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Section 2. Form of decision ........................................... 471Section 3. Amended decision ........................................ 472Section 4. Resolution ..................................................... 472Section 5. Promulgation and notice of decision and resolution ............................................ 472Section 6. Entry of judgment and final resolution ...... 473Section 7. Execution of judgment ................................. 474
Rule 15 – Motion for Reconsideration or New Trial
Section 1. Who may and when to file motion ............... 474Section 2. Opposition .................................................... 474Section 3. Hearing of the motion .................................. 475Section 4. Effect of filing the motion ............................ 475Section 5. Grounds of motion for new trial .................. 475Section 6. Contents of motion for reconsideration or new trial and notice ........................... 476Section 7. No second motion for reconsideration or for new trial ........................................ 477Section 8. Ruling ........................................................ 477
Rule 16 – Appeal
Section 1. Appeal to Supreme Court by petition for review on certiorari ............................ 477Section 2. Effect of appeal ............................................ 477
Rule 17 – Legal Fees and Costs
Section 1. Additional fees and costs ............................. 477
Rule 18 – Effectivity
Section 1. Effectivity of the Revised Rules .................. 478
xxix
APPENDIX C
Republic Act No. 9335
Section 1. Short Title .................................................... 479Section 2. Declaration of Policy .................................... 479Section 3. Coverage ....................................................... 479Section 4. Rewards and Incentives Fund .................... 480Section 5. Incentives to District Collection Offices ..... 481Section 6. Revenue Performance Evaluation Board ... 482Section 7. Powers and Functions of the Board ............ 482Section 8. Liability of Officials, Examiners and Employees of the BIR and the BOC .. 484Section 9. Right to Appeal ............................................ 484Section 10. Performance Report ................................... 485Section 11. Rules and Regulations ............................... 485Section 12. Joint Congressional Oversight Committee 485Section 13. Separability Clause ................................... 486Section 14. Repealing Clause ....................................... 486Section 15. Effectivity .................................................... 486
APPENDIX D
Republic Act No. 9480
Section 1. Coverage ....................................................... 487Section 2. Availment of the Amnesty ........................... 487Section 3. What to Declare in the SALN ..................... 488Section 4. Presumption of Correctness of the SALN .... 488Section 5. Grant of Tax Amnesty ................................. 489Section 6. Immunities and Privileges .......................... 490Section 7. When and Where to File and Pay ................ 492Section 8. Exceptions ..................................................... 492Section 9. Unlawful Divulgence of Tax Amnesty Return and Statement of Assets, Liabilities and Networth ....................... 493Section 10. Penalties ...................................................... 494
xxx
Section 11. Moratorium on the Grant of Tax Amnesty ................................................. 495Section 12. Information Management Program .......... 495Section 13. Disposition of Proceeds from the Tax Amnesty ......................................... 495Section 14. Publication of List of Taxpayers and Filers ............................................... 496Section 15. Implementing Rules and Regulations ....... 496Section 16. Effectivity .................................................... 496
APPENDIX E
Revenue Regulations No. 10-2008
Revenue Regulations No. 10-2008 ................................ 497 (Implementing Pertinent Provisions of R.A. No. 9504)
1
1
THENATIONAL INTERNAL
REVENUE CODEOF THE PHILIPPINES
(Pres. Decree No. 1158 as amendedup to R.A. No. 9504*)
TITLE I
ORGANIZATION AND FUNCTION OF THE BUREAU OF INTERNAL
REVENUE SECTION 1. Title of the Code. — This Code shall be known as the National Internal Revenue Code of 1997.
SEC. 2. Powers and Duties of the Bureau of Internal Revenue. — The Bureau of Internal Revenue shall be under the supervision and control of the Department of Finance and its powers and duties shall comprehend the assessment and collection of all
*An Act Amending Sections 22, 24, 34, 35, 51 and 79 of the National Internal Revenue Code of 1997. Also incorporated in this edition are Republic Act Nos. 9224, 9238, 9243, 9294, 9337 and 9503.
2 THE NATIONAL INTERNAL REVENUE CODE Secs. 3-4
national internal revenue taxes, fees, and charges, and !"#$#%&'()#*#%!$'&$+,,$&'(&#-!.(#/0$1#%+,!-#/0$+%2$3%#/$connected therewith, including the execution of judg-ments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. The Bureau shall give effect to and administer the supervisory and police powers conferred to it by this Code or other laws. (a)1
SEC. 3. !"#$%&'%()#*+,&-%&."$&/01$*0&-%&23-ternal Revenue. — The Bureau of Internal Revenue shall have a chief to be known as Commissioner of Internal Revenue, hereinafter referred to as the Com-missioner and four (4) assistant chiefs to be known as Deputy Commissioners. (a)
SEC. 4. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases. — The power to interpret the provisions of this Code and other tax laws shall be under the exclusive and original jurisdiction of the Commissioner, subject to review by the Secretary of Finance.
The power to decide disputed assessments, re-funds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under this Code or other laws or portions there-of administered by the Bureau of Internal Revenue is vested in the Commissioner, subject to the exclusive appellate jurisdiction of the Court of Tax Appeals. (n)2
1As amended by R.A. No. 8424 otherwise known as The Tax Reform Act of 1997. 2New provision introduced by R.A. No. 8424.
3Sec. 5
SEC. 5. Power of the Commissioner to Ob-tain Information, and to Summon/Examine, and Take Testimony of Persons. — In ascertaining the correctness of any return, or in making a return when none has been made, or in determining the liability of any person for any internal revenue tax, or in collecting any such liability, or in evaluating tax compliance, the Commissioner is authorized:
(A) To examine any book, paper, record, or other data which may be relevant or material to such inquiry;
(B) To obtain on a regular basis from any person other than the person whose internal revenue tax liability is subject to audit or investigation, or from any '&3)#$'($'&3)#($'&$!"#$%+!-'%+,$+%2$,')+,$4'5#(%*#%!/0$government agencies and instrumentalities, including the Bangko Sentral ng Pilipinas and government-owned or -controlled corporations, any information such as, but not limited to, costs and volume of production, receipts or sales and gross incomes of taxpayers, +%2$ !"#$%+*#/0$+22(#//#/0$+%2$3%+%)-+,$ /!+!#*#%!/$of corporations, mutual fund companies, insurance companies, regional operating headquarters of multinational companies, joint accounts, associations, joint ventures or consortia and registered partnerships, and their members;
(C) To summon the person liable for tax or (#6.-(#2$!'$3,#$+$(#!.(%0$'($+%7$'&3)#($'($#*1,'7##$'&$such person, or any person having possession, custody, or care of the books of accounts and other accounting records containing entries relating to the business of
TITLE I — ORGANIZATION AND FUNCTION OF THE BUREAU OF INTERNAL REVENUE