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PRESIDENTIAL DECREE NO. 929
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PRESIDENTIAL DECREE NO. 929 -
AMENDING SUBPARAGRAPH (b) OF Section 84 AND Section 191 OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED
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WHEREAS,
local contractors contribute substantially to the development program
of the country;chanroblesvirtualawlibrary
WHEREAS, local contractors are at a disadvantage in competitive bidding
with foreign contractors in view of limited capital and financial
resources;chanroblesvirtualawlibrary
WHEREAS, in order to be able to compete with big foreign contractors,
it may be necessary for them to enter into joint ventures to pool their
limited resources in undertaking big construction projects; chanroblesvirtualawlibrary
WHEREAS, to assist them in achieving competitiveness with foreign
contractors, the joint ventures formed by them should not be considered
an additional income tax;chanroblesvirtualawlibrary
WHEREAS, the corporate income tax is imposed on joint ventures as well
as on the entities composing such joint ventures;chanroblesvirtualawlibrary
WHEREAS, the 3x contractor's tax is based both on the total contract
price received by a principal contractor and on the portion of such
contract price which is allocated by the said principal contractor to
and received by, a subcontractor;chanroblesvirtualawlibrary
WHEREAS, the double taxation of gross receipts to a principal
contractor and sub-contractor also diminishes the competitive
capability of local contractors against foreign contractors; chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers in me vested by the
Constitution, do hereby order and decree the following:cralaw:red
Section 1. Subsection (b), Section 84 of the
National Internal Revenue Code, as amended is hereby further amended to
read as follows:cralaw:red
"(b) The term "corporation" includes partnership no
matter how created or organized, joint stock companies, joint accounts
(cuentas en participacion), associations or insurance companies, but
does not include general professional partnership and a joint venture
formed for the purpose of undertaking construction projects.
Section 2. Section 191 of the National Internal
Revenue Code is hereby amended by adding thereto the following
paragraph:cralaw:red
"The term "gross receipts" shall not include the portion of the total
contract price paid by a principal contractor to a subcontractor under
a subcontract arrangement which portion shall form part of the taxable
gross receipt of the latter."
Section 3. Effectivity. — This Decree shall take
effect beginning with calendar year 1976.
Done in the City of Manila,
this 4th day of May in the year of Our Lord, nineteen hundred and
seventy-six.
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