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BATAS PAMBANSA BILANG. 41BATAS PAMBANSA BLG. 41 - AN ACT
FURTHER AMENDING CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE
CODE
Section 1. The
titles of subparagraph (B) and (C) of Sec. 30 (a) (1) of the
National Internal Revenue Code are hereby amended to read as
follows:
"(B) Limitation
of entertainment express for individuals."
"(C) General requirements for entertainment,
amusement or recreation."
Sec. 2. Sec. 30(a) (1) (D) of the National
Internal Revenue Code is hereby further amended by adding thereto a new
subparagraph to read as follows:
"(D)
Substantiation required. — No deduction shall be allowed under the
preceding subparagraphs (B) and (C), unless the taxpayer substantiates
with official receipts or by adequate records or by sufficient evidence
corroborating his own statement (i) the amount of such expense or other
item (ii) the date and place of entertainment, amusement, or
recreation, (iii) the business purpose of the expense or other items
and (iv) the business relationship to the taxpayer of the persons
entertained or using the facility. The Minister of Finance may by
regulations provide that some or all of the preceding sentence shall
not apply in the case of an expense which does not exceed an amount
prescribed pursuant to such regulations."
Sec. 3. Sec. 30(d) (1) (A) of the National
Internal Revenue Code is hereby amended to read as follows:
"(A) If
incurred in trade or business: Provided, however, That a loss
representing the excess over the income, of allowable expenses and
other deductions directly or proximately attributable or related to the
production or earning of such income from a particular line of business
or activity, shall not be allowed as a deduction from or offset against
income derived from other sources: Provided, further, That a net
operating loss sustained in a particular line of business or activity
within three years after the commencement of such business or activity
may, in a manner prescribed by regulations promulgated by the Minister
of Finance, be carried over as a deduction from the income derived from
the same particular line of business or activity for two (2)
consecutive years immediately following the year such loss was
sustained."
Sec. 4. Sec. 36 of the National Internal
Revenue Code is hereby amended to read as follows:
"Sec. 36.
Inventories. — Whenever in the judgment of the Commissioner of Internal
Revenue, the use of inventories is necessary in order to determine
clearly the income of any taxpayer, inventories shall be taken by such
taxpayer upon such basis as the Minister of Finance may, by
regulations, prescribe as conforming as nearly as may be to the best
accounting practice in the trade or business and as most clearly
reflecting the income.
"If a taxpayer, after having
complied with the terms and conditions prescribed by the Commissioner,
uses a particular method of valuing its inventory for any taxable year,
then such method shall be used in all subsequent taxable year unless:
"(i) with the approval of the Commissioner, a change
to a different method is authorized; or
"(ii) the Commissioner finds that the nature of the
stock on hand (e.g. its scarcity, liquidity, market-ability and price
movements) is such that inventory gains should be considered realized
for tax purposes and, therefore, it is necessary to modify the
valuation method for purposes of ascertaining the income, profits, or
loss in a more realistic manner; Provided, however, That the
Commissioner shall not exercise his authority to require a change in
inventory method more often than once every three years; and Provided,
further, That any change in an inventory valuation method must be
subject to approval by the minister of Finance."
Sec. 5. Paragraph (m) of Sec. 30 is hereby
amended to read as follows:
"(m) Additional
requirement for deductibility of certain payments. — Any amount paid or
payable which is otherwise deductible from, or taken into account in
computing, gross income or for which depreciation or amortization may
be allowed under this section and Sec. 29, shall be allowed as a
deduction only if its shown that the tax required to be deducted and
withheld therefrom has been paid to the Bureau of Internal revenue in
accordance with this section. Section s 54 and 93 of this Code."
Sec. 6. Subparagraph (F) of Sec. 37(a) (4) of
the National Internal Revenue code is hereby amended to read as follows:
"(F) Technical
advice, assistance or services rendered in connection with technical
management or administration of any scientific, industrial or
commercial undertaking, venture, project or scheme; and".
Sec. 7. Paragraph (b) of Sec. 45 of the
National Internal Revenue Code is hereby amended to read as
follows:
"(b) Where to
file. — Except in cases where the Commissioner otherwise permits, the
return shall be filed with the Revenue District Officer, Collection
Agent, or duly authorized Treasurer of the municipality in which such
person has his legal residence or principal place of business in the
Philippines, or if there be no legal residence or place of business in
the Philippines, then with the Office of the Commissioner of Internal
Revenue."
Sec. 8. Paragraph (f) of section 53 of the
National Internal Revenue Code is hereby amended to read as follows:
"(f) The
Minister of Finance may, upon recommendation of the Commissioner of
Internal Revenue, require also the withholding of a tax at appropriate
rates not to exceed thirty-five per centum on amounts payable or paid
to persons (natural or juridical) residing in the Philippines by the
same persons mentioned in paragraph (b) (1) of this section which shall
be credited against the income tax liability of the taxpayer for the
taxable year."
Sec. 9. Sec. 54 of the National Internal
Revenue Code is hereby amended to read as follows:
"Sec. 54.
Returns and payment of taxes withheld at source. — (a) Quarter return
and payment of taxes withheld. — Taxes deducted and withheld under
Section fifty-three shall be covered by a return and paid to the
Revenue District Officer, Collection Agent, or duly authorized
Treasurer of the city, or municipality where the withholding agent has
his legal residence or principal place of business, or where the
withholding agent is a corporation, where the principal office is
located. 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. The Commissioner of Internal Revenue may, with the
approval of the Minister of Finance, require these withholding agents
to pay or deposit the taxes deducted or withheld at more frequent
intervals when necessary to protect the interest of the Government. The
return for final withholding tax shall be filed and the payment made
within 25 days from the close of each calendar quarter, while the
return for creditable withholding taxes shall be filed and the payment
made not later than the last day of the month following the close of
the quarter during which withholding was made.
"(b) Penalties
for failure to render returns; for rendering false or fraudulent
return; for nonpayment or late payment of taxes withheld. — The
surcharges prescribed in Section seventy-two and the specific penalties
prescribed in Section seventy-three of this Title in cases of failure
to render returns, for filing false or fraudulent returns and for
failure to pay tax shall apply to failure to file returns or pay the
tax required under this Section . In case the taxes deducted and
withheld are not paid within the time prescribed, there shall be added
a surcharge of five per centum on the amount of tax unpaid and interest
at the rate of fourteen per centum per annum from the date the same
become due until paid.
"(c) Statement
of income payments made and taxes withheld. — Every withholding agent
required to deduct and withhold taxes under Section fifty-three shall
furnish each recipient, in respect to his or its receipts during the
calendar quarter or year, a written statement showing the income or
other payments made by the withholding agent during such quarter or
year, and the amount of the tax deducted and withheld therefrom,
simultaneously upon payment at the request of the payee, but not later
than the 20th day following the close of the quarter in the case of
corporate payee, or not later than March 1 of the following year in the
case of individual payee for creditable withholding taxes. For final
withholding taxes, the statement should be given to the payee on or
before January 31 of the succeeding year.
"(d) Annual
returns. — Every withholding agent required to deduct and withholding
taxes under section fifty-three shall submit to the Commissioner of
Internal Revenue a reconciliation statement of quarterly payments and
list of payees and income payments. In the case of final withholding
taxes, the return shall be filed on or before January 31 of the
succeeding taxes, and for creditable withholding taxes, not later than
March 1 of the year following the year for which the annual report is
being submitted. This return, if made and filed in accordance with
regulations approved by the minister of Finance, shall be sufficient
compliance with the requirements of Section seventy-seven of this Title
in respect to the income payments.
"The Commissioner may, by
regulations, grant to any withholding agent a reasonable extension of
time to furnish and submit the return required in this
subsection.
"(e) Surcharge and interest for failure to deduct and
withhold. — If the withholding agent, in violation of the provisions of
the preceding section and implementing regulations thereunder, fails to
deduct and withhold the amount of tax required under said section and
regulations, he shall be liable to pay in addition to the tax required
to be deducted and withheld, a surcharge of fifty per centum if the
failure is due to willful neglect or with intent to defraud the
Government, or twenty-five per centum if the failure is not due to such
causes, plus interest at the rate of fourteen per centum per annum from
the time the tax is required to be withheld until the date of
assessment.
"(f) Income of
recipient. — Income upon which any creditable tax is required to
be withheld at the source under Sec. 53 shall be included in the
return of its recipient but any 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 Sec. 295; if the income tax collected at source is
less than the tax due on his return, the difference shall be paid in
accordance with the provisions of Sec. 51."
Sec. 10. Sec. 86 of the National Internal
Revenue Code is hereby amended to read as follows:
"Section
86. Place of filing declaration and paying quarterly
income tax. — Except in cases where the Commissioner otherwise permits,
the declaration shall be filed with, and the tax thereon paid to, the
Revenue District Officer, or the Collection Agent, or duly authorized
Treasurer of the municipality where the individual is residing or in
case of a corporation, in which is located its principal office and
where its books of accounts and other data from which the return is
prepared are kept; in case of an individual who has no legal residence
in the Philippines, or a corporation that has no office of any kind or
agency in the Philippines, then the returns shall be filed and the tax
thereon paid with the Office of the Commissioner of Internal
Revenue."
Sec. 11. Paragraph (c) of Sec. 153 of the
National Internal Revenue Code is hereby amended to read as follows:
"(c) Naptha,
per liter of volume capacity, fifty centavos; gasoline and all other
similar products of distillation, per liter of volume capacity,
sixty-two centavos: Provided, That on premium and aviation gasoline the
tax shall be sixty-seven centavos and fifty-five centavos,
respectively, per liter of volume capacity;"
Sec. 12. Paragraph (s) of Sec. 187 of the
National Internal Revenue Code is hereby amended to read as follows:
"(s) "Real
estate broker' includes any person, other than a real estate salesman
as hereinafter defined, who for another, and for a compensation or in
the expectation or promise of receiving compensation, (1) sells or
offers for sale, buys or offers to buy, lists, or solicits for
prospective purchasers, or negotiates the purchase, sale or exchange of
real estate or interests therein; (2) or negotiates loans on real
estate; (3) or leases or offers to lease or negotiates the sale,
purchase or exchange of a lease or rents or places for rent or collects
rent from real estate or improvements thereon; (4) or shall be employed
by or on behalf of the owner or owners of lots or other parcels of real
estate at a stated salary, on commission, or otherwise, to sell such
real estate or any parts thereof in lots or parcels. "Real estate
salesman" means any natural person regularly employed by a real estate
broker to perform in behalf of such broker any or all of the functions
of a real estate broker. One act of a character embraced within the
above definition shall constitute the person performing or attempting
to perform the same as a real estate broker. But the foregoing
definitions do not include a person who shall directly perform any of
the acts aforesaid with reference to his own property, where such acts
are performed in the regular course of or as an incident to the
management of such property; nor shall they apply to persons acting
pursuant to a duly executed power of attorney from the owner
authorizing final consummation by performance of a contract conveying
real estate by sale, mortgage or lease; nor shall they apply to a
receiver, trustee or assignee in bankruptcy or insolvency, or to any
person acting pursuant to the order of any court; nor to a trustee
selling under a deed of trust. "Real estate dealer" includes any person
engaged in the business of buying, selling, exchanging, leasing, or
renting property as principal and holding himself out as a full or
part-time dealer in real estate or as an owner of real property or
properties rented or offered to rent: Provided, however, That an owner
of sugar lands subject to tax under Commonwealth Act Numbered Five
hundred and sixty-seven shall not be considered as a real estate dealer
under this definition."
Sec. 13. Sec. 196(j) of the National Internal
Revenue Code is hereby amended to read as follows:
"(j)
Air-conditioning units; Provided, however, That in the case of imported
air-conditioning units, components and parts, there shall be levied,
assessed and collected a tax equivalent to thirty-five per cent based
on the landed cost thereof plus mark-up. For purposes of this
subparagraph, all air-conditioning units which have not been certified
by the Board of Investment as "locally manufactured" shall be deemed to
be imported. All imported air-conditioning components and parts other
than those which are of common and general use and those which are
specifically authorized to be imported under the local content or
rationalization program of the Board of Investments for the
air-conditioning industry, shall likewise be subject to the thirty-five
per cent sales tax herein imposed."
Sec. 14. This Act shall take effect immediately
upon approval hereof.
Approved: September 7,
1979.
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