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PRESIDENTIAL DECREE NO. 299-A
PRESIDENTIAL DECREE NO.
299-A - IMPOSING A 15% TAX ON DIVIDENDS RECEIVED BY A DOMESTIC OR
RESIDENT FOREIGN CORPORATION FROM A DOMESTIC CORPORATION AMENDING
Sections 24, 29, 53 AND 65 OF THE NATIONAL INTERNAL REVENUE CODE FOR
THE PURPOSE
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WHEREAS, it
is imperative to adopt measures responsive to the requirements of a
developing economy foremost of which is the financing of economic
development programs;chanroblesvirtualawlibrary
WHEREAS, in order to encourage more capital investment for large
projects, an appropriate tax be imposed on dividends in the same manner
as the tax imposed on interest on foreign loans. chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers in me vested by the Constitution as
Commander-in-Chief of the Armed Forces of the Philippines, and pursuant
to Proclamation No. 1081, dated September 21, 1972, as amended, do
hereby order and decree as follows:cralaw:red
Section 1. The provisions of subsection (d) of
Section 24 of the National Internal Revenue Code are hereby transferred
to new subsection (e) added to said section and said subsection (d)
shall now read as follows:cralaw:red
"(d) Rate of tax on certain dividends. — Dividends
received by a domestic or residence foreign corporation from a domestic
corporation liable to tax under this Chapter shall be subject to tax at
15% on the total amount thereof which shall be collected and paid as
provided in Section 53 of this Code."
Section 2. A new subsection is hereby added to
Section 24 of the National Internal Revenue Code to contain the former
provisions of subsection (d) of the same section amended to read as
follows:cralaw:red
"(e) The provisions of existing special or general
laws to the contrary notwithstanding, all corporate taxpayers not
specifically exempt under Sections 24 (c) (1) and (d) and 27 of this
Code shall pay the rates provided in this section. All corporations,
agencies, or instrumentalities owned or controlled by the Government,
including the Government Service Insurance System and the Social
Security System but excluding educational institutions, shall pay such
rate of tax upon their taxable net income as are imposed by this
section upon associations or corporations engaged in a similar business
or industry."
Section 3. Subsection (e) of Section 29 of the
National Internal Revenue Code is hereby repealed.
Section 4. A new subsection is hereby added to
Section 53 of the National Internal Revenue Code to be denominated as
subsection (d) and to read as follows:cralaw:red
"(d) Withholding tax on certain dividends. — The tax
imposed under section 24 (d) of this Code on dividends shall be
withheld by the payor corporation and paid to the Commissioner of
Internal Revenue under appropriate return at the same time that the
dividends are paid to the recipient corporations."
Section 5. Subsection (a) of Section 65 of the
National Internal Revenue Code is hereby amended to read as follows:cralaw:red
"(a) Dividends (other than dividends subject to tax
under Section 24(d) of this Code), interest (other than interest
constituting rent as defined in subsection (g) hereof), royalties
(other than mineral oil, or gas royalties), and annuities. The term
royalties, as herein used, includes income from copyrights, patent, and
other similar revenues."
Section 6. Dividends already received and reported in
the corporation's quarterly income tax return shall no longer be
subject to the tax imposed in Section 24 (d) of the National Internal
Revenue Code as now amended but considered as if it was subject thereto
for purposes of Section 65(a) of the same Code as now amended.
Section 7. The Commissioner of Internal Revenue shall
promulgate the rules and regulations to implement this Decree subject
to the approval of the Secretary of Finance.
Section 8. This Decree takes effect immediately.
Done in the City of Manila,
this 21st day of September, in the year of our Lord, nineteen hundred
and seventy-three.
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