WHEREAS,
Presidential Decree No. 612, otherwise known as the Insurance Code has
already been promulgated;chanroblesvirtualawlibrary
WHEREAS, Section 418 of the said Insurance Code created the Insurance
Fund out of the proceeds of taxes on insurance premiums imposed by
Section 255 of the National Internal Revenue Code, and from which fund
the Insurance Commission will derive its operating expenses in lieu of
the special assessments being made by the Office of the Insurance
Commissioner from insurance companies in accordance with the provisions
of Sections 2, 3, and 4 of Republic Act No. 275;chanroblesvirtualawlibrary
WHEREAS, there is need to amend the provisions of Section 255 of the
National Internal Revenue Code to harmonize the provisions thereof with
the provision of Section 418 of the Insurance Code so as not to disturb
the collection of the premium tax which accrue to the general fund.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers in me vested by the Constitution do hereby
decree and order:cralaw:red
Section 1. That Section 255 of the National Internal
Revenue Code is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 255. Taxes on insurance premium. — There shall
be collected from every person, company, or corporation (except purely
cooperative companies or association) doing insurance business of any
sort in the Philippines a tax of FOUR per centum of the total premiums
collected, whether such premiums are paid in money, notes, credits or
any substitute for money, but premiums refunded within six months after
payment on account of rejection of risk or returned for other reason to
a person insured shall not be included in the taxable receipts; nor
shall any tax be paid upon reinsurance by a company that has already
paid the tax; nor upon premiums collected or received by any branch of
a domestic corporation, firm or association doing business outside the
Philippines on account of life insurance of the insured who is a
non-resident, if any percentage tax on such premiums is imposed by the
foreign country where the branch is established; nor upon premiums
collected or received on account of reinsurance, if the risk insured
against covers property located outside the Philippines, or the
insured, in case of personal insurance, resides outside the
Philippines, if any percentage tax on such premiums is imposed by the
foreign country where the original insurance has been issued or
perfected; NOR UPON THAT PORTION OF THE PREMIUMS COLLECTED OR RECEIVED
BY INSURANCE COMPANIES ON VARIABLE CONTRACTS (AS DEFINED IN Section
232(2) OF PRESIDENTIAL DECREE NO. 612) IN EXCESS OF THE AMOUNTS
NECESSARY TO INSURE THE LIVES OF VARIABLE CONTRACT OWNERS.
"Cooperative companies or associations are such as are conducted by the
members thereof with the money collected from among themselves and
solely for their own protection and not for profit." chanroblesvirtualawlibrary
Section 2. That Section 358 of the National Internal
Revenue Code is hereby amended by adding the following paragraph
thereto, viz;chanroblesvirtualawlibrary
"Sec. 358. Disposition of proceeds of certain taxes.
—.
"TWENTY-FIVE PER CENTUM OF THE PREMIUM TAX COLLECTED UNDER Section TWO
HUNDRED FIFTY-FIVE OF THIS CODE SHALL ACCRUE TO THE INSURANCE FUND (AS
CONTEMPLATED IN Section 418 OF PRESIDENTIAL DECREE NO. 612) WHICH SHALL
BE USED FOR THE PURPOSE OF DEFRAYING THE EXPENSES OF THE INSURANCE
COMMISSION. THE COMMISSIONER OF INTERNAL REVENUE SHALL TURN OVER AND
DELIVER THE SAID INSURANCE FUND TO THE INSURANCE COMMISSION AS SOON AS
THE COLLECTION IS MADE."
Section 3. All laws, rules and regulations which are
inconsistent herewith are hereby repealed, modified and/or amended
accordingly.
Section 4. This decree shall take effect upon
approval.
Done in the City of Manila,
this 1st day of July, in the year of our Lord nineteen hundred and
seventy-five.
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