CHAPTER IXRETURNS
AND
PAYMENT OF TAX
SEC.
51. Individual Return. -
(A) Requirements.
-
(1) Except
as
provided in paragraph (2) of this Subsection, the following individuals
are required to file an income tax return:
(a) Every Filipino
citizen residing in the Philippines;
(b) Every Filipino
citizen residing outside the Philippines, on his income from sourceswithin the Philippines;
(c) Every alien
residing
in the Philippines, on income derived from sources withinthe Philippines; and
(d) Every
nonresident
alien engaged in trade or business or in the exercise of professionin the Philippines.
(2) The following
individuals shall not be required to file an income tax return;
(a) An individual
whose gross income does not exceed his total personal and additional
exemptions
for dependents under Section 35: Provided, 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,
regardless
of the amount of gross income;
(b) An individual
with respect to pure compensation income, as defined in Section 32
(A)(1),
derived from sources within the Philippines, the income tax on which
has
been correctly withheld under the provisions of Section 79 of this
Code:
Provided, That an individual deriving compensation concurrently
from two or more employers at any time during the taxable year shall
file
an income tax return: Provided, further, That an individual
whose
compensation income derived from sources within the Philippines exceeds
Sixty thousand pesos (P60,000) shall also file an income tax return;
(c) An individual
whose sole income has been subjected to final withholding tax pursuant
to Section 57(A) of this Code; and
(d) An individual
who is exempt from income tax pursuant to the provisions of this Code
and
other laws, general or special.
(3) The forgoing
notwithstanding,
any individual not required to file an income tax return may
nevertheless
be required to file an information return pursuant to rules and
regulations
prescribed by the Secretary of Finance, upon recommendation of the
Commissioner.
(4) The income tax
return shall be filed in duplicate by the following persons:
(a) A resident
citizen
- on his income from all sources;
(b) A nonresident
citizen - on his income derived from sources within the Philippines;
(c) A resident
alien
- on his income derived from sources within the Philippines; and
(d) A nonresident
alien engaged in trade or business in the Philippines - on his incomederived from sources within the Philippines.(B) Where to File.chanrobles virtual law library
- Except in cases where the Commissioner otherwise permits, the return
shall be filed with an authorized agent bank, Revenue District Officer,
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, or if there be no legal residence or place of
business
in the Philippines, with the Office of the Commissioner.
(C) When to File.
-
(1) The return of any
individual specified above shall be filed on or before the fifteenth
(15th)
day of April of each year covering income for the preceding taxable
year.
(2) Individuals
subject
to tax on capital gains;
(a) From the sale
or
exchange of shares of stock not traded thru a local stock exchange as
prescribed
under Section 24(c) shall file a return within thirty (30) days after
each
transaction and a final consolidated return on or before April 15 of
each
year covering all stock transactions of the preceding taxable year; and
(b) From the sale
or
disposition of real property under Section 24(D) shall file a return
within
thirty (30) days following each sale or other disposition.
(D) Husband
and Wife. - Married individuals, whether citizens, resident or
nonresident aliens, who do not derive income purely from compensation,
shall file a return for the taxable year to include the income of both
spouses, but where it is impracticable for the spouses to file one
return,
each spouse may file a separate return of income but the returns so
filed
shall be consolidated by the Bureau for purposes of verification for
the
taxable year.
(E) Return of
Parent to Include Income of Children.
- The income of unmarried minors derived from properly received from a
living parent shall be included in the return of the parent, except (1)
when the donor's tax has been paid on such property, or (2) when the
transfer
of such property is exempt from donor's tax.
(F) Persons Under
Disability.
- If the taxpayer is unable to make his own return, the return may be
made
by his duly authorized agent or representative or by the guardian or
other
person charged with the care of his person or property, the principal
and
his representative or guardian assuming the responsibility of making
the
return and incurring penalties provided for erroneous, false or
fraudulent
returns.
(G) Signature
Presumed Correct.
- 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.
SEC.
52. Corporation Returns. -
(A) Requirements.
- Every corporation subject to the tax herein imposed, except foreign
corporations
not engaged in trade or business in the Philippines, shall render, in
duplicate,
a true and accurate quarterly income tax return and final or adjustment
return in accordance with the provisions of Chapter XII of this Title.
The return shall be filed by the president, vice-president or other
principal
officer, and shall be sworn to by such officer and by the treasurer or
assistant treasurer.cralaw:red
(B) Taxable Year
of Corporation.
- A corporation may employ either calendar year or fiscal year as a
basis
for filing its annual income tax return: Provided, That the corporation
shall not change the accounting period employed without prior approval
from the Commissioner in accordance with the provisions of Section 47
of
this Code.cralaw:red
(C) Return of
Corporation Contemplating Dissolution or Reorganization.
- Every corporation shall, within thirty (30) days after the
adoption
by the corporation of a resolution or plan for its dissolution, or for
the liquidation of the whole or any part of its capital stock,
including
a corporation which has been notified of possible involuntary
dissolution
by the Securities and Exchange Commission, or for its reorganization,
render
a correct return to the Commissioner, verified under oath, setting
forth
the terms of such resolution or plan and such other information as the
Secretary of Finance, upon recommendation of the commissioner, shall,
by
rules and regulations, prescribe.cralaw:red
The dissolving or reorganizing
corporation shall, prior to the issuance by the Securities and Exchange
Commission of the Certificate of Dissolution or Reorganization, as may
be defined by rules and regulations prescribed by the Secretary of
Finance,
upon recommendation of the Commissioner, secure a certificate of tax
clearance
from the Bureau of Internal Revenue which certificate shall be
submitted
to the Securities and Exchange Commission.cralaw:red
(D) Return on
Capital Gains Realized from Sale of Shares of Stock not Traded in the
Local
Stock Exchange.
- 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), 25 (A)(3), 27 (E)(2), 28(A)(8)(c) and 28 (B)(5)(c),
shall
file a return within thirty (30) days after each transactions and a
final
consolidated return of all transactions during the taxable year on or
before
the fifteenth (15th) day of the fourth (4th) month following the close
of the taxable year.cralaw:red
SEC.
53. Extension of Time to File Returns.
- The Commissioner may, in meritorious cases, grant a reasonable
extension
of time for filing returns of income (or final and adjustment returns
in
case of corporations), subject to the provisions of Section 56 of this
Code.cralaw:red
SEC.
54. Returns of Receivers, Trustees in Bankruptcy or Assignees.
- In cases wherein receivers, trustees in bankruptcy or assignees
are
operating the property or business of a corporation, subject to the tax
imposed by this Title, such receivers, trustees or assignees shall make
returns of net income as and for such corporation, in the same manner
and
form as such organization is hereinbefore required to make returns, and
any tax due on the income as returned by receivers, trustees or
assignees
shall be assessed and collected in the same manner as if assessed
directly
against the organizations of whose businesses or properties they have
custody
or control.
SEC.
55. Returns of General Professional Partnerships.
- Every general professional partnership shall file, in duplicate, a
return
of its income, except income exempt under Section 32 (B) of this Title,
setting forth the items of gross income and of deductions allowed by
this
Title, and the names, Taxpayer Identification Numbers (TIN), addresses
and shares of each of the partners.
SEC.
56. Payment and Assessment of Income Tax for Individuals and
Corporation.
-
(A) Payment of
Tax. -
(1) In General.
- 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 the case of tramp
vessels,
the shipping agents and/or the husbanding agents, and in their absence,
the captains thereof are required to file the return herein provided
and
pay the tax due thereon before their departure. Upon failure of the
said
agents or captains to file the return and pay the tax, the Bureau of
Customs
is hereby authorized to hold the vessel and prevent its departure until
proof of payment of the tax is presented or a sufficient bond is filed
to answer for the tax due.
(2) Installment
of Payment.chanrobles virtual law library
- When the tax due is in excess of Two thousand pesos (P2,000), the
taxpayer
other than a corporation may elect to pay the tax in two (2) equal
installments
in which case, the first installment shall be paid at the time the
return
is filed and the second installment, on or before July 15 following the
close of the calendar year. If any installment is not paid on or before
the date fixed for its payment, the whole amount of the tax unpaid
becomes
due and payable, together with the delinquency penalties.
(3) Payment of
Capital Gains Tax.
- The total amount of tax imposed and prescribed under Section 24 (c),
24(D), 27(E)(2), 28(A)(8)(c) and 28(B)(5)(c) shall be paid on the date
the return prescribed therefor is filed by the person liable thereto: Provided,
That if the seller submits proof of his intention to avail
himself
of the benefit of exemption of capital gains under existing special
laws,
no such payments shall be required : Provided, further, That in
case of failure to qualify for exemption under such special laws and
implementing
rules and regulations, the tax due on the gains realized from the
original
transaction shall immediately become due and payable, subject to the
penalties
prescribed under applicable provisions of this Code: Provided,
finally,
That if the seller, having paid the tax, submits such proof of intent
within
six (6) months from the registration of the document transferring the
real
property, he shall be entitled to a refund of such tax upon
verification
of his compliance with the requirements for such exemption.
In case the taxpayer elects
and is qualified to report the gain by installments under Section 49 of
this Code, the tax due from each installment payment shall be paid
within
(30) days from the receipt of such payments.
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, and the tax herein
imposed,
if any, has been paid.
(B) Assessment
and Payment of Deficiency Tax.
- After the return is filed, the Commissioner shall examine it and
assess the correct amount of the tax. The tax or deficiency income tax
so discovered shall be paid upon notice and demand from the
Commissioner.cralaw:red
As used in this Chapter,
in respect of a tax imposed by this Title, the term "deficiency" means:
(1) The amount by
which
the tax imposed by this Title exceeds the amount shown as the tax by
the
taxpayer upon his return; but the amount so shown on the return shall
be
increased by the amounts previously assessed (or collected without
assessment)
as a deficiency, and decreased by the amount previously abated,
credited,
returned or otherwise repaid in respect of such tax; or
(2) If no amount
is
shown as the tax by the taxpayer upon this return, or if no return is
made
by the taxpayer, then the amount by which the tax exceeds the amounts
previously
assessed (or collected without assessment) as a deficiency; but such
amounts
previously assessed or collected without assessment shall first be
decreased
by the amounts previously abated, credited returned or otherwise repaid
in respect of such tax.
SEC.
57. Withholding of Tax at Source. -
(A) Withholding
of Final Tax on Certain Incomes.
- Subject to rules and regulations the Secretary of Finance may
promulgate,
upon the recommendation of the Commissioner, requiring the filing of
income
tax return by certain income payees, the tax imposed or prescribed by
Sections
24(B)(1), 24(B)(2), 24(C), 24(D)(1); 25(A)(2), 25(A)(3), 25(B), 25(C),
25(D), 25(E), 27(D)(!), 27(D)(2), 27(D)(3), 27(D)(5), 28 (A)(4),
28(A)(5),
28(A)(7)(a), 28(A)(7)(b), 28(A)(7)(c), 28(B)(1), 28(B)(2), 28(B)(3),
28(B)(4),
28(B)(5)(a), 28(B)(5)(b), 28(B)(5)(c); 33; and 282 of this Code on
specified
items of income shall be withheld by payor-corporation and/or person
and
paid in the same manner and subject to the same conditions as provided
in Section 58 of this Code.cralaw:red
(B) Withholding
of Creditable Tax at Source.chanrobles virtual law library
- The Secretary of Finance may, upon the recommendation of the
Commissioner,
require the withholding of a tax on the items of income payable to
natural
or juridical persons, residing in the Philippines, by
payor-corporation/persons
as provided for by law, at the rate of not less than one percent (1%)
but
not more than thirty-two percent (32%) thereof, which shall be credited
against the income tax liability of the taxpayer for the taxable year.cralaw:red
(C) Tax-free Covenant
Bonds.chanrobles virtual law library
In any case where bonds, mortgages, deeds of trust or other similar
obligations
of domestic or resident foreign corporations, contain a contract or
provisions
by which the obligor agrees to pay any portion of the tax imposed in
this
Title upon the obligee or to reimburse the obligee for any portion of
the
tax or to pay the interest without deduction for any tax which the
obligor
may be required or permitted to pay thereon or to retain therefrom
under
any law of the Philippines, or any state or country, the obligor shall
deduct bonds, mortgages, deeds of trust or other obligations, whether
the
interest or other payments are payable annually or at shorter or longer
periods, and whether the bonds, securities or obligations had been or
will
be issued or marketed, and the interest or other payment thereon paid,
within or without the Philippines, if the interest or other payment is
payable to a nonresident alien or to a citizen or resident of the
Philippines.
SEC.
58. Returns and Payment of Taxes Withheld at Source. -
(A) Quarterly
Returns and Payments of Taxes Withheld.
- Taxes deducted and withheld under Section 57 by withholding agents
shall
be covered by a return and paid to, except in cases where the
Commissioner
otherwise permits, an 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.cralaw:red
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.cralaw:red
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, 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: Provided, That the Commissioner,
with
the approval of the Secretary of Finance, may 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.cralaw:red
(B) Statement
of Income Payments Made and Taxes Withheld.
- Every withholding agent required to deduct and withhold taxes
under
Section 57 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 late than the
twentieth
(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.cralaw:red
(C) Annual Information
Return.
- 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, amount of taxes withheld from
each
payee and such other pertinent information as may be required by the
Commissioner.
In the case of final withholding taxes, the return shall be filed on or
before January 31 of the succeeding year, 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 the rules and regulations approved by the Secretary of
Finance, upon recommendation of the Commissioner, shall be sufficient
compliance
with the requirements of Section 68 of this Title in respect to the
income
payments.cralaw:red
The Commissioner may,
by rules and regulations, grant to any withholding agent a reasonable
extension
of time to furnish and submit the return required in this Subsection.cralaw:red
(D) Income of
Recipient.
- 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 204; 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
Section
56.cralaw:red
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.cralaw:red
(E) Registration
with Register of Deeds.
- 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, and
the capital gains or creditable withholding tax, if any, has been paid:
Provided, however, That the information as may be required by
rules
and regulations to be prescribed by the Secretary of Finance, upon
recommendation
of the Commissioner, shall be annotated by the Register of Deeds in the
Transfer Certificate of Title or Condominium Certificate of Title: Provided,
further, That in cases of transfer of property to a corporation,
pursuant
to a merger, consolidation or reorganization, and where the law allows
deferred recognition of income in accordance with Section 40, the
information
as may be required by rules and regulations to be prescribed by the
Secretary
of Finance, upon recommendation of the Commissioner, shall be annotated
by the Register of Deeds at the back of the Transfer Certificate of
Title
or Condominium Certificate of Title of the real property involved:
Provided,
finally, That any violation of this provision by the Register of
Deeds
shall be subject to the penalties imposed under Section 269 of this
Code.
SEC.
59. Tax on Profits Collectible from Owner or Other Persons.
- The tax imposed under this Title upon gains, profits, and income
not falling under the foregoing and not returned and paid by virtue of
the foregoing or as otherwise provided by law shall be assessed by
personal
return under rules and regulations to be prescribed by the Secretary of
Finance, upon recommendation of the Commissioner. The intent and
purpose
of the Title is that all gains, profits and income of a taxable class,
as defined in this Title, shall be charged and assessed with the
corresponding
tax prescribed by this Title, and said tax shall be paid by the owners
of such gains, profits and income, or the proper person having the
receipt,
custody, control or disposal of the same. For purposes of this Title,
ownership
of such gains, profits and income or liability to pay the tax shall be
determined as of the year for which a return is required to be rendered.