NIRC (H) Authority of the Commissioner to Prescribe

AN ACT AMENDING THE NATIONAL INTERNAL Additional Procedural or Documentary

REVENUE CODE, AS AMENDED, AND FOR OTHER Requirements
PURPOSES
Republic Act No. 8424 Section 7. Authority of the Commissioner to Delegate
December 11, 1997 Power
(A) The power to recommend the promulgation of rules
Section 1. Short Title. - This Act shall be cited as the and regulations by the Secretary of Finance
"Tax Reform Act of 1997". (B) The power to issue rulings of first impression or to
Section 2. State Policy. reverse, revoke or modify any existing ruling of the
Section 3. Presidential Decree No. 1158, as amended Bureau;
by, among others, Presidential Decree (C) The power to compromise or abate, under Sec. 204
No. 1994 and Executive Order No. 273, otherwise (A) and (B) of this Code
known as the National Internal Revenue (D) The power to assign or reassign internal revenue
Code, is hereby further amended. officers to establishments where articles subject to
Section 4. The Secretary of Finance shall, upon excise tax are produced or kept.
recommendation of the Commissioner of
Internal Revenue, promulgate and publish the necessary Section 8. Duty of the Commissioner to Ensure the
rules and regulations for the Provision and Distribution of forms, Receipts,
effective implementation of this Act. Certificates, and Appliances, and the Acknowledgment
Section 5. Transitory Provisions of Payment of Taxes.
Section 6. Separability Clause (A) Provision and Distribution to Proper Officials.
Section 7. Repealing Clauses (B) Receipts for Payment Made.
Section 8. Effectivity
Section 9. Internal Revenue Districts
TITLE I. ORGANIZATION AND FUNCTION OF Section 10. Revenue Regional Director
THE BUREAU OF INTERNAL REVENUE Section 11. Duties of Revenue District Officers and
Section 1. Title of the Code Other Internal Revenue Officers
Section 2. Powers and Duties of the Bureau of Internal Section 12. Agents and Deputies for Collection of
Revenue National Internal Revenue Taxes
Section 3. Chief Officials of the Bureau of Internal Section 13. Authority of a Revenue Offices
Revenue Section 14. Authority of Officers to Administer Oaths
Section 4. Power of the Commissioner to Interpret Tax and Take Testimony
Laws and to Decide Tax Cases Section 15. Authority of Internal Revenue Officers to
Section 5. Power of the Commissioner to Obtain Make Arrests and Seizures
Information, and to Summon, Examine, Section 16. Assignment of Internal Revenue Officers
and Take Testimony of Persons Involved in Excise Tax Functions to Establishments
Where Articles subject to Excise Tax are Produced or
Section 6. Power of the Commissioner to Make Kept
assessments and Prescribe additional Section 17. Assignment of Internal Revenue Officers
Requirements for Tax Administration and Enforcement and Other Employees to Other Duties
(A) Examination of Returns and Determination of Tax Section 18. Reports of violation of Laws
Due Section 19. Contents of Commissioner's Annual Report
(B) Failure to Submit Required Returns, Statements, Section 20. Submission of Report and Pertinent
Reports and other Documents Information by the Commissioner
(C) Authority to Conduct Inventory-taking, (A) Submission of Pertinent Information to Congress
surveillance and to Prescribe Presumptive Gross (B) Report to Oversight Committee
Sales and Receipts
(D) Authority to Terminate Taxable Period Section 21. Sources of Revenue
(E) Authority of the Commissioner to Prescribe Real (a) Income tax;
Property Values (b) Estate and donor's taxes;
(F) Authority of the Commissioner to inquire into (c) Value-added tax;
Bank Deposit Accounts (d) Other percentage taxes;
(G) Authority to Accredit and Register Tax Agents (e) Excise taxes;
(f) Documentary stamp taxes; and
(g) Such other taxes as are or hereafter may be imposed (C) Government-owned or Controlled-Corporations,
and collected by the Bureau of Internal Revenue. Agencies or Instrumentalities.
(D) Rates of Tax on Certain Passive Incomes.
(E) Minimum Corporate Income Tax on Domestic
TITLE II. TAX ON INCOME Corporations.
CHAPER I. DEFINITIONS
Section 22. Definitions. (A) (FF). Section 28. Rates of Income Tax on Foreign
Corporations.
CHAPER II. GENERAL PRINCIPLES
Section 23. General Principles of Income Taxation in (A) Tax on Resident Foreign Corporations.
the Philippines (1) In General.
(2) Minimum Corporate Income Tax on Resident
CHAPER III. TAX ON INDIVIDUALS ForeignCorporations.
Section 24. Income Tax Rates (3) International Carrier.
(A) Rates of Income Tax on Individual Citizen and (4) Offshore Banking Units.
Individual Resident Alien of the Philippines. (5) Tax on Branch Profits Remittances
(B) Rate of Tax on Certain Passive Income (6) Regional or Area Headquarters and Regional
(C) Capital Gains from Sale of Shares of Stock not Operating Headquarters of Multinational
Traded in the Stock Exchange Companies.
(D) Capital Gains from Sale of Real Property (7) Tax on Certain Incomes Received by a Resident
Foreign Corporation.
Section 25. Tax on Nonresident Alien Individual. (a) Interest from Deposits
(A) Nonresident Alien Engaged in trade or Business (b) Income Derived under the Expanded Foreign
Within the Philippines. Currency Deposit System.
(1) In General. (c) Capital Gains from Sale of Shares of Stock
(2) Cash and/or Property Dividends from a Not Traded in the Stock Exchange.
Domestic Corporation or Joint Stock Company, (d) Intercorporate Dividends.
or Insurance or Mutual Fund Company or
Regional Operating Headquarter or (B) Tax on Nonresident Foreign Corporation.
Multinational Company, or Share in the (1) In General.
Distributable Net Income of a Partnership (2) Nonresident Cinematographic Film Owner, Lessor
(Except a General Professional Partnership), or Distributor.
Joint Account, Joint Venture Taxable as a (3) Nonresident Owner or Lessor of Vessels Chartered
Corporation or Association., Interests, by Philippine Nationals.
Royalties, Prizes, and Other Winnings. (4) Nonresident Owner or Lessor of Aircraft,
(3) Capital Gains. Machineries and Other Equipment.
(5) Tax on Certain Incomes Received by a Nonresident
(B) Nonresident Alien Individual Not Engaged in Foreign Corporation.
Trade or Business Within the Philippines. (a) Interest on Foreign Loans.
(C) Alien Individual Employed by Regional or Area (b) Intercorporate Dividends.
Headquarters and Regional Operating (c) Capital Gains from Sale of Shares of Stock not
Headquarters of Multinational Companies Traded in the Stock Exchange.
(D) Alien Individual Employed by Offshore Banking
Units. Section 29. Imposition of Improperly Accumulated
(E) Alien Individual Employed by Petroleum Service Earnings Tax.
Contractor and Subcontractor (A) In General.

Section 26. Tax Liability of Members of General (B) Tax on Corporations Subject to Improperly
Professional Partnerships. Accumulated Earnings Tax.
(1) In General.
CHAPER IV. TAX ON CORPORATIONS (2) Exceptions.
Section 27. Rates of Income tax on Domestic
Corporations. (C) Evidence of Purpose to Avoid Income Tax.
(A) In General. (1) Prima Facie Evidence
(B) Proprietary Educational Institutions and Hospitals. (2) Evidence Determinative of Purpose.
(D) Improperly Accumulated Taxable Income. CHAPER VI. COMPUTATION OF GROSS
Reasonable Needs of the Business. INCOME
Section 32. Gross Income.
Section 30. Exemptions from Tax on Corporations. (A) General Definition. (A-F)
(A-K) (B) Exclusions from Gross Income. (A-H)
(A) Labor, agricultural or horticultural organization not (1) Life Insurance.
organized principally for profit; (2) Amount Received by Insured as Return of
(B) Mutual savings bank not having a capital stock Premium.
represented by shares, and cooperative bank without (3) Gifts, Bequests, and Devises.
capital stock organized and operated for mutual (4) Compensation for Injuries or Sickness.
purposes and without profit; (5) Income Exempt under Treaty.
(C) A beneficiary society, order or association, (6) Retirement Benefits, Pensions, Gratuities, etc.
operating fort he exclusive benefit of the members (A-F)
such as a fraternal organization operating under the (a) Retirement benefits received under Republic Act
lodge system, or mutual aid association or a No. 7641 and those received by officials and
nonstock corporation organized by employees employees of private firms
providing for the payment of life, sickness, (b) Any amount received by an official or employee or
accident, or other benefits exclusively to the by his heirs from the employer as a consequence of
members of such society, order, or association, or separation
nonstock corporation or their dependents; (c) The provisions of any existing law to the contrary
(D) Cemetery company owned and operated notwithstanding, social security benefits, retirement
exclusively for the benefit of its members; gratuities, pensions and other similar benefits
(E) Nonstock corporation or association organized and received by resident or nonresident citizens of the
operated exclusively for religious, charitable, Philippines or aliens who come to reside
scientific, athletic, or cultural purposes, or for the permanently in the Philippines
rehabilitation of veterans, no part of its net income (d) Payments of benefits due or to become due to any
or asset shall belong to or inures to the benefit of person residing in the Philippines under the laws of
any member, organizer, officer or any specific the United States administered by the United States
person; Veterans Administration;
(F) Business league chamber of commerce, or board of (e) Benefits received from or enjoyed under the Social
trade, not organized for profit and no part of the net Security System in accordance with the provisions
income of which inures to the benefit of any private of Republic Act No. 8282.
stock-holder, or individual; (f) Benefits received from the GSIS under Republic
(G) Civic league or organization not organized for profit Act No. 8291, including retirement gratuity
but operated exclusively for the promotion of social received by government officials and employees.
welfare;
(H) A nonstock and nonprofit educational institution; (7) Miscellaneous Items.
(I) Government educational institution; (a) Income Derived by Foreign Government.
(J) Farmers' or other mutual typhoon or fire insurance (b) Income Derived by the Government or its Political
company, mutual ditch or irrigation company, Subdivisions
mutual or cooperative telephone company, or like (c) Prizes and Awards.
organization of a purely local character, the income (d) Prizes and Awards in sports Competition.
of which consists solely of assessments, dues, and (e) 13th Month Pay and Other Benefits
fees collected from members for the sole purpose of (f) GSIS, SSS, Medicare and Other Contributions.
meeting its expenses; and (g) Gains from the Sale of Bonds, Debentures or other
(K) Farmers', fruit growers', or like association Certificate of Indebtedness.
organized and operated as a sales agent for the (h) Gains from Redemption of Shares in Mutual Fund.
purpose of marketing the products of its members
and turning back to them the proceeds of sales, less Section 33. Special Treatment of Fringe Benefit.
the necessary selling expenses on the basis of the (A) Imposition of Tax.
quantity of produce finished by them; (B) Fringe Benefit defined.
(C) Fringe Benefits Not Taxable.
CHAPER V. COMPUTATION OF TAXABLE
INCOME CHAPER VII. ALLOWABLE DEDUCTIONS
Section 31. Taxable Income Defined. Section 34. Deductions from Gross Income.
(A) Expenses
(1) Ordinary and Necessary Trade, Business or (d) any other method which may be prescribed by the
Professional Expenses. Secretary of Finance upon recommendation of the
(a) In General. Commissioner.
(b) Substantiation Requirements. (3) Agreement as to Useful Life on Which Depreciation
(c) Bribes, Kickbacks and Other Similar Payments. Rate is Based.
(4) Depreciation of Properties Used in Petroleum
(2) Expenses Allowable to Private Educational Operations.
Institutions. (5) Depreciation of Properties Used in Mining
Operations.
(B) Interest. (6) Depreciation Deductible by Nonresident Aliens
(1) In General. Engaged in Trade or Business or Resident Foreign
(2) Exceptions. Corporations.
(3) Optional Treatment of Interest Expense. (7) Depletion of Oil and Gas Wells and Mines.
(1) In General.
(C) Taxes. (2) Election to Deduct Exploration and Development
(1) In General. Expenditures.
(2) Limitations on Deductions. (3) Depletion of Oil and Gas Wells and Mines
(3) Credit Against Tax for Taxes of Foreign Countries. Deductible by a Nonresident Alien individual or
(4) Limitations on Credit. Foreign Corporation.
(5) Adjustments on Payment of Incurred Taxes.
(6) Year in Which Credit Taken. (H) Charitable and Other Contributions.
(7) Proof of Credits. (1) In General.
(2) Contributions Deductible in Full.
(D) Losses. (a) Donations to the Government.
(1) In General. (b) Donations to Certain Foreign Institutions or
(a) If incurred in trade, profession or business; International Organizations.
(b) Of property connected with the trade, business (c) Donations to Accredited Nongovernment
or profession, if the loss arises from fires, Organizations.
storms, shipwreck, or other casualties, or from (3) Valuation.
robbery, theft or embezzlement (4) Proof of Deductions.
(c) No loss shall be allowed as a deduction under
this Subsection if at the time of the filing of the (I) Research and Development.
return, such loss has been claimed as a (1) In General.
deduction for estate tax purposes in the estate (2) Amortization of Certain Research and
tax return. Development Expenditures
(2) Proof of Loss. (3) Limitations on deduction.
(3) Net Operating Loss Carry-Over.
(4) Capital Losses. (J) Pension Trusts.
(5) Losses From Wash Sales of Stock or Securities. (K) Additional Requirements for Deductibility of
(6) Wagering Losses. Certain Payments.
(7) Abandonment Losses. (L) Optional Standard Deduction.
(M) Premium Payments on Health and/or
(E) Bad Debts Hospitalization Insurance of an Individual
(1) In General. Taxpayer.
(2) Securities Becoming Worthless.
Section 35. Allowance of Personal Exemption for
(F) Depreciation. Individual Taxpayer.
(1) General Rule. (A) In General.
(2) Use of Certain Methods and Rates. (B) Additional Exemption for Dependents.
(a) The straight-line method; (C) Change of Status.
(b) Declining-balance method, using a rate not (D) Personal Exemption Allowable to Nonresident
exceeding twice the rate which would have been Alien Individual.
used had the annual allowance been computed Section 36. Items not Deductible.
under the method described in Subsection (F) (1); (A) General Rule.
(c) The sum-of-the-years-digit method; and (B) Losses from Sales or Exchanges of Property.
Section 37. Special Provisions Regarding Income and Chaper VIII. Accounting Periods and Methods of
Deductions of Insurance Companies, Accounting
Whether Domestic or Foreign. Section 43. General Rule.
(A) Special Deduction Allowed to Insurance Section 44. Period in which Items of Gross Income
Companies. Included.
(B) Mutual Insurance Companies. Section 45. Period for which Deductions and Credits
(C) Mutual Marine Insurance Companies. Taken.
(D) Assessment Insurance Companies. Section 46. Change of Accounting Period.
Section 38. Losses from Wash Sales of Stock or Section 47. Final or Adjustment Returns for a Period of
Securities. Less than Twelve (12) Months.
(A) Returns for Short Period Resulting from Change of
Section 39. Capital Gains and Losses. Accounting Period.
(A) Definitions (B) Income Computed on Basis of Short Period.
(1) Capital Assets. Section 48. Accounting for Long-term Contracts.
(2) Net Capital Gain. Section 49. Installment Basis.
(3) Net Capital Loss. (A) Sales of Dealers in Personal Property.
(B) Percentage Taken into Account. (B) Sales of Realty and Casual Sales of Personality.
(C) Limitation on Capital Losses. (C) Sales of Real Property Considered as Capital Asset
(D) Net Capital Loss Carry-over. by Individuals.
(E) Retirement of Bonds, Etc. (D) Change from Accrual to Installment Basis.
(F) Gains or losses from Short Sales, Etc. Section 50. Allocation of Income and Deductions.
Chaper IX. Returns and Payment of Tax
Section 40. Determination of Amount and Recognition Section 51. Individual Return.
of Gain or Loss. (A) Requirements.
(A) Computation of Gain or Loss. (1) individuals are required to file
(B) Basis for Determining Gain or Loss from Sale or (2) individuals shall not be required to file
Disposition of Property. (3) individual not required to file an income tax return
(C) Exchange of Property. may
(1) General Rule. nevertheless be required to file an information return
(2) Exception. pursuant
(3) Exchange Not Solely in Kind. to rules and regulations prescribed by the Secretary of
(4) Assumption of Liability. Finance,
(5) Basis upon recommendation of the Commissioner.
(6) Definitions (4) income tax return shall be filed in duplicate by the
following
Section 41. Inventories persons
Section 42. Income from Sources Within the (B) Where to File.
Philippines. (C) When to File.
(A) Gross Income From Sources Within the Philippines. (D) Husband and Wife.
(1) Interests (E) Return of Parent to Include Income of Children.
(2) Dividends. (F) Persons Under Disability.
(3) Services. (G) Signature Presumed Correct.
(4) Rentals and royalties. Section 52. Corporation Returns.
(5) Sale of Real Property. (A) Requirements.
(6) Sale of Personal Property. (B) Taxable Year of Corporation.
(B) Taxable Income From Sources Within the (C) Return of Corporation Contemplating Dissolution
Philippines. or Reorganization.
(1) General Rule. (D) Return on Capital Gains Realized from Sale of
(2) Exception. Shares of Stock not
(C) Gross Income From Sources Without the Traded in the Local Stock Exchange.
Philippines. Section 53. Extension of Time to File Returns.
(D) Taxable Income From Sources Without the Section 54. Returns of Receivers, Trustees in
Philippines. Bankruptcy or Assignees.
(E) Income From Sources Partly Within and Partly Section 55. Returns of General Professional
Without the Philippines. Partnerships.
(F) Definitions.
Section 56. Payment and Assessment of Income Tax for Partners.
Individuals and Corporation. Chaper XII. Quarterly Corporate Income Tax Annual
(A) Payment of Tax. Declaration and Quarterly Payments of
(1) In General. Income Taxes
(2) Installment of Payment. Section 74. Declaration of Income Tax for Individuals.
(3) Payment of Capital Gains Tax. (A) In General.
(B) Assessment and Payment of Deficiency Tax. (B) Return and Payment of Estimated Income Tax by
Section 57. Withholding of Tax at Source. Individuals.
(A) Withholding of Final Tax on Certain Incomes. (C) Definition of Estimated Tax.
(B) Withholding of Creditable Tax at Source. Section 75. Declaration of Quarterly Corporate Income
(C) Tax-free Covenant Bonds. Tax.
Section 58. Returns and Payment of Taxes Withheld at Section 76. Final Adjustment Return.
Source. Section 77. Place and Time of Filing and Payment of
(A) Quarterly Returns and Payments of Taxes Withheld. Quarterly Corporate Income Tax.
(B) Statement of Income Payments Made and Taxes (A) Place of Filing.
Withheld. (B) Time of Filing the Income Tax Return.
(C) Annual Information Return. (C) Time of Payment of the Income Tax.
(D) Income of Recipient. Chaper XIII. Withholding on Wages
(E) Registration with Register of Deeds. Section 78. Definitions.
Section 59. Tax on Profits Collectible from Owner or (A) Wages
Other Persons. (B) Payroll Period.
Chaper X. Estates and Trusts (C) Employee.
Section 60. Imposition of Tax. (D) Employer.
(A) Application of Tax. Section 79. Income Tax Collected at Source.
(B) Exception. (A) Requirement of Withholding.
(C) Computation and Payment. (B) Tax Paid by Recipient.
(1) In General. (C) Refunds or Credits.
(2) Consolidation of Income of Two or More Trusts. (1) Employer.
Section 61. Taxable Income. (2) Employees.
Section 62. Exemption Allowed to Estates and Trusts. (D) Personal Exemptions.
Section 63. Revocable trusts. (1) In General.
Section 64. Income for Benefit of Grantor. (2) Exemption Certificate.
Section 65. Fiduciary Returns. (a) When to File.
Section 66. Fiduciaries Indemnified Against Claims for (b) Change of Status.
Taxes Paid. (c) Use of Certificates.
Chaper XI. Other Income Tax Requirements (d) Failure to Furnish Certificate.
Section 67. Collection of Foreign Payments. (E) Withholding on Basis of Average Wages.
Section 68. Information at Source as to Income (F) Husband and Wife.
Payments. (G) Nonresident Aliens.
Section 69. Return of Information of Brokers. (H) Year-end Adjustment.
Section 70. Returns of Foreign Corporations. Section 80. Liability for Tax.
(A) Requirements (A) Employer.
(B) Form and Contents of Return. (B) Employee.
Section 71. Disposition of Income Tax Returns, Section 81. Filing of Return and Payment of Taxes
Publication of Lists of Taxpayers and Filers. Withheld.
Section 72. Suit to Recover Tax Based on False or Section 82. Return and Payment in Case of Government
Fraudulent Returns. Employees.
Section 73. Distribution of dividends or Assets by Section 83. Statements and Returns.
Corporations. (A) Requirements.
(A) Definition of Dividends. (B) Annual Information Returns.
(B) Stock Dividend. (C) Extension of time.
(C) Dividends Distributed are Deemed Made from Most Title III. Estate and Donor's Taxes
Recently Chaper I. Estate Tax
Accumulated Profits. Section 84. Rates of Estate Tax.
(D) Net Income of a Partnership Deemed Constructively Section 85. Gross Estate.
Received by (A) Decedent's Interest.
(B) Transfer in Contemplation of Death. Section 99. Rates of Tax Payable by Donor.
(C) Revocable Transfer. (A) In General.
(D) Property Passing Under General Power of (B) Tax Payable by Donor if Donee is a Stranger.
Appointment. (C) Any contribution in cash or in kind to any candidate,
(E) Proceeds of Life Insurance. political party or
(F) Prior Interests. coalition of parties for campaign purposes shall be
(G) Transfers of Insufficient Consideration. governed by the
(H) Capital of the Surviving Spouse. Election Code, as amended.
Section 86. Computation of Net Estate. Section 100. Transfer for Less Than Adequate and full
(A) Deductions Allowed to the Estate of Citizen or a Consideration.
Resident. Section 101. Exemption of Certain Gifts.
(1) Expenses, Losses, Indebtedness, and taxes. (A) In the Case of Gifts Made by a Resident.
(2) Property Previously Taxed. (B) In the Case of Gifts Made by a Nonresident not a
(3) Transfers for Public Use. Citizen of the
(4) The Family Home. Philippines.
(5) Standard Deduction. (C) Tax Credit for Donor's Taxes Paid to a Foreign
(6) Medical Expenses. Country.
(7) Amount Received by Heirs Under Republic Act No. (1) In General.
4917. (2) Limitations on Credit.
(B) Deductions Allowed to Nonresident Estates. Section 102. Valuation of Gifts Made in Property.
(1) Expenses, Losses, Indebtedness, and taxes. Section 103. Filing of Return and Payment of Tax.
(2) Property Previously Taxed. (A) Requirements.
(3) Transfers for Public Use. (B) Time and Place of Filing and Payment.
(C) Share in the Conjugal Property. Section 104. Definitions.
(D) Miscellaneous Provisions. Title IV. Value Added Tax
(E) Tax Credit for Estate Taxes paid to a Foreign Chaper I. Imposition of Tax
Country. Section 105. Persons Liable.
(1) In General. Section 106. Value-Added Tax on Sale of Goods or
(2) Limitations on Credit. Properties.
Section 87. Exemption of Certain Acquisitions and (A) Rate and Base of Tax.
Transmissions. (B) Transactions Deemed Sale.
Section 88. Determination of the Value of the Estate. (C) Changes in or Cessation of Status of a VAT-
(A) Usufruct registered Person.
(B) Properties. (D) Determination of the Tax.
Section 89. Notice of Death to be Filed. Section 107. Value-Added Tax on Importation of
Section 90. Estate Tax Returns. Goods.
(A) Requirements. Section 108. Value-added Tax on Sale of Services and
(B) Time for filing. Use or Lease of Properties.
(C) Extension of Time. (A) Rate and Base of Tax.
(D) Place of Filing. (B) Transactions Subject to Zero Percent (0%) Rate
Section 91. Payment of Tax. (C) Determination of the Tax.
(A) Time of Payment. Section 109. Exempt Transactions. (a-z).
(B) Extension of Time. Section 110. Tax Credits.
(C) Liability for Payment. (A) Creditable Input Tax.
Section 92. Discharge of Executor or Administrator (B) Excess Output or Input Tax.
from Personal Liability. (C) Determination of Creditable Input Tax.
Section 93. Definition of Deficiency. Section 111. Transitional/Presumptive Input Tax
Section 94. Payment before Delivery by Executor or Credits.
Administrator. (A) Transitional Input Tax Credits.
Section 95. Duties of Certain Officers and Debtors. (B) Presumptive Input Tax Credits.
Section 96. Restitution of Tax Upon Satisfaction of Section 112. Refunds or Tax Credits of Input Tax.
Outstanding Obligations. (A) Zero-rated or Effectively Zero-rated Sales.
Section 97. Payment of Tax Antecedent to the Transfer (B) Capital Goods.
of Shares, Bonds or Rights. (C) Cancellation of VAT Registration.
Chaper II. Donor's Tax (D) Period within which Refund or Tax Credit of Input
Section 98. Imposition of Tax. Taxes shall be Made.
(E) Manner of Giving Refund. (B) Where to File.
Chaper II. Compliance Requirements Title VI. Excise Tax on Certain Goods
Section 113. Invoicing and Accounting Requirements Chaper I. General Provisions
for VAT-Registered Persons. Section 129. Goods subject to Excise Taxes.
(A) Invoicing Requirements. Section 130. Filing of Return and Payment of Excise
(B) Accounting Requirements. Tax on Domestic Products.
Section 114. Return and Payment of Value-Added Tax. (A) Persons Liable to File a Return, Filing of Return on
(A) In General. Removal and
(B) Where to File the Return and Pay the Tax. Payment of Tax.
(C) Withholding of Creditable Value-added Tax. (1) Persons Liable to File a Return.
Section 115. Power of the Commissioner to Suspend the (2) Time for Filing of Return and Payment of the Tax.
Business Operations of a Taxpayer. (3) Place of Filing of Return and Payment of the Tax.
Title V. Other Percentage Taxes (4) Exceptions.
Section 116. Tax on Persons Exempt from Value-Added (B) Determination of Gross Selling Price of Goods
Tax (VAT) Subject to Ad Valorem
Section 117. Percentage Tax on Domestic Carriers and Tax.
Keepers of Garages. (C) Manufacturer's or Producer's Sworn Statement.
Section 118. Percentage Tax on International Carriers. (D) Credit for Excise tax on Goods Actually Exported.
Section 119. Tax on Franchises. Section 131. Payment of Excise Taxes on Importer
Section 120. Tax on Overseas Dispatch, Message or Articles.
Conversation Originating from the (A) Persons Liable.
Philippines. (B) Rate and Basis of the Excise Tax on Imported
(A) Persons Liable. Articles.
(B) Exemptions. Section 132. Mode of Computing Contents of Cask or
(1) Government. Package.
(2) Diplomatic Services. Chaper II. Exemption or Conditional Tax-Free Removal
(3) International Organizations. of Certain Articles
(4) News Services. Section 133. Removal of Wines and distilled Spirits for
Section 121. Tax on Banks and Non-bank Financial Treatment of Tobacco Leaf.
Intermediaries. Section 134. Domestic Denatured Alcohol.
Section 122. Tax on Finance Companies. Section 135. Petroleum Products Sold to International
Section 123. Tax on Life Insurance Premiums. Carriers and Exempt Entities or
Section 124. Tax on Agents of Foreign Insurance Agencies.
Companies. (A) International carriers of Philippine or foreign
Section 125. Amusement Taxes. registry on their use or
Section 126. Tax on Winnings. consumption outside the Philippines
Section 127. Tax on Sale, Barter or Exchange of Shares (B) Exempt entities or agencies covered by tax treaties,
of Stock Listed and Traded through the conventions and
Local Stock Exchange or through Initial Public other international agreements for their use of
Offering. consumption
(A) Tax on Sale, Barter or Exchange of Shares of Stock (C) Entities which are by law exempt from direct and
Listed and Traded indirect taxes.
through the Local Stock Exchange. Section 136. Denaturation, Withdrawal and Use of
(B) Tax on Shares of Stock Sold or Exchanged Through Denatured Alcohol.
Initial Public Section 137. Removal of Spirits Under Bond for
Offering. Rectification.
(C) Return on Capital Gains Realized from Sale of Section 138. Removal of Fermented Liquors to Bonded
Shares of Stocks. Warehouse.
(D) Common Provisions. Section 139. Removal of Damaged Liquors Free of Tax.
Section 128. Returns and Payment of Percentage Taxes. Section 140. Removal of Tobacco Products without
(A) Returns of Gross Sales, Receipts or Earnings and Prepayment of Tax.
Payment of Tax. Chaper III. Excise Tax on Alcohol Products
(1) Persons Liable to Pay Percentage Taxes. Section 141. Distilled Spirits.
(2) Person Retiring from Business. Section 142. Wines
(3) Exceptions. Section 143. Fermented Liquor.
(4) Determination of Correct Sales or Receipts. Chaper IV. Excise Tax on Tobacco Products
Section 144. Tobacco Products. Section 171. Authority of Internal Revenue Officer in
Section 145. Cigars and Cigarettes. Searching for Taxable Articles.
Section 146. Inspection Fee. Section 172. Detention of Package Containing Taxable
Section 147. Definition of Terms. Articles.
Chaper V. Excise Tax on Petroleum Products Title VII. Documentary Stamp Tax
Section 148. Manufactured Oils and Other Fuels. Section 173. Stamp Taxes Upon Documents, Loan
Chaper VI. Excise Tax on Miscellaneous Articles Agreements, Instruments and Papers.
Section 149. Automobiles. Section 174. Stamp Tax on Debentures and Certificates
Section 150. Non-essential Goods. of Indebtedness.
Chaper VII. Excise Tax on Mineral Products Section 175. Stamp Tax on Original Issue of Shares of
Section 151. Mineral Products. Stock.
(A) Rates of Tax. Section 176. Stamp Tax on Sales, Agreements to Sell,
(B) For purposes of this Section, the term Memoranda of Sales, Deliveries or
Chaper VIII. Administrative Provisions Regulating Transfer of Due-bills, Certificates of Obligation, or
Business of Persons Dealing in Articles Shares of Certificates of Stock.
Subject to Excise Tax Section 177. Stamp Tax on Bonds, Debentures,
Section 152. Extent of Supervision Over Establishments Certificate of Stock or Indebtedness Issued in
Producing Taxable Output. Foreign Countries.
Section 153. Records to be Kept by Manufacturers; Section 178. Stamp Tax on Certificates of Profits or
Assessment Based Thereon. Interest in Property or Accumulations.
Section 154. Premises Subject to Approval by Section 179. Stamp Tax on Bank Checks, Drafts,
Commissioner. Certificates of Deposit not Bearing Interest,
Section 155. Manufacturers to Provide Themselves with and Other Instruments.
Counting or Metering Devices to Section 180. Stamp Tax on All Bonds, Loan
Determine Production. Agreements, promissory Notes, Bills of Exchange,
Section 156. Labels and Form of Packages. Drafts, Instruments and Securities Issued by the
Section 157. Removal of Articles After the Payment of Government or Any of its
Tax. Instrumentalities, Deposit Substitute Debt Instruments,
Section 158. Storage of Goods in Internal-revenue Certificates of Deposits Bearing
Bonded Warehouses. Interest and Others Not Payable on Sight or Demand.
Section 159. Proof of Exportation; Exporter's Bond. Section 181. Stamp Tax Upon Acceptance of Bills of
Section 160. Manufacturers' and Importers' Bond. Exchange and Others.
(A) Initial Bond. Section 182. Stamp Tax on Foreign Bills of Exchange
(B) Bond for the Succeeding Years of Operation. and Letters of Credit.
Section 161. Records to be Kept by Wholesale Dealers. Section 183. Stamp Tax on Life Insurance Policies.
Section 162. Records to be Kept by Dealers in Leaf Section 184. Stamp Tax on Policies of Insurance Upon
Tobacco. Property.
Section 163. Preservation of Invoices and Stamps. Section 185. Stamp Tax on Fidelity Bonds and Other
Section 164. Information to be Given by Manufacturers, Insurance Policies.
Importers, Indentors, and Section 186. Stamp Tax on Policies of Annuities and
Wholesalers of any Apparatus or Mechanical Pre-Need Plans.
Contrivance Specially for the Manufacture of Section 187. Stamp Tax on Indemnity Bonds.
Articles Subject to Excise Tax and Importers, Indentors, Section 188. Stamp Tax on Certificates.
Manufacturers or Sellers of Section 189. Stamp Tax on Warehouse Receipts.
Cigarette Paper in Bobbins, Cigarette Tipping Paper or Section 190. Stamp Tax on Jai-Alai, Horse Racing
Cigarette Filter Tips. Tickets, lotto or Other Authorized Numbers
Section 165. Establishment of Distillery Warehouse. Games.
Section 166. Custody of Distillery or Distillery Section 191. Stamp Tax on Bills of Lading or Receipts.
Warehouse. Section 192. Stamp Tax on Proxies.
Section 167. Limitation on Quantity of Spirits Removed Section 193. Stamp Tax on Powers of Attorney.
from Warehouse. Section 194. Stamp tax on Leases and Other Hiring
Section 168. Denaturing Within Premises. Agreements.
Section 169. Recovery of Alcohol for Use in Arts and Section 195. Stamp Tax on Mortgages, Pledges and
Industries. Deeds of Trust.
Section 170. Requirements Governing Rectification and Section 196. Stamp tax on Deeds of Sale and
Compounding of Liquors. Conveyances of Real Property.
Section 197. Stamp Tax on Charter Parties and Similar Section 225. When Property to be Sold or Destroyed.
Instruments. Section 226. Disposition of funds Recovered in Legal
Section 198. Stamp Tax on Assignments and Renewals Proceedings or Obtained from
of Certain Instruments. Forfeitures.
Section 199. Documents and Papers Not Subject to Section 227. Satisfaction of Judgment Recovered
Stamp Tax. Against any Internal Revenue Officer.
Section 200. Payment of Documentary Stamp Tax. Chaper III. Protesting an Assessment, Refund, etc.
(A) In General. Section 228. Protesting of Assessment.
(B) Time for Filing and Payment of the Tax. Section 229. Recovery of Tax Erroneously or Illegally
(C) Where to File. Collected.
(D) Exception. Section 230. Forfeiture of Cash Refund and of Tax
Section 201. Effect of Failure to Stamp Taxable Credit.
Document. (A) Forfeiture of Refund.
Title VIII. Remedies (B) Forfeiture of Tax Credit.
Chaper I. Remedies in General (C) Transitory Provision.
Section 202. Final Deed to Purchaser. Section 231. Action to Contest Forfeiture of Chattel.
Section 203. Period of Limitation Upon Assessment and Title IX. Compliance Requirements
Collection. Chaper I. Keeping of Books of Accounts and Records
Section 204. Authority of the Commissioner to Section 232. Keeping of Books of Accounts.
Compromise, Abate and Refund or Credit (A) Corporations, Companies, Partnerships or Persons
Taxes. Required to Keep
Chaper II. Civil Remedies for Collection of Taxes Books of Accounts.
Section 205. Remedies for the Collection of Delinquent (B) Independent Certified Public Accountant Defined.
Taxes. Section 233. Subsidiary Books.
Section 206. Constructive Distraint of the Property of A Section 234. Language in which Books are to be Kept;
Taxpayer. Translation.
Section 207. Summary Remedies. Section 235. Preservation of Books and Accounts and
(A) Distraint of Personal Property. Other Accounting Records.
(B) Levy on Real Property. Chaper II. Administrative Provisions
Section 208. Procedure for Distraint and Garnishment. Section 236. Registration Requirements.
Section 209. Sale of Property Distrained and (A) Requirements.
Disposition of Proceeds. (B) Annual Registration Fee.
Section 210. Release of Distrained Property Upon (C) Registration of Each Type of Internal Revenue Tax.
Payment Prior to Sale. (D) Transfer of Registration.
Section 211. Report of Sale to Bureau of Internal (E) Other Updates.
Revenue. (F) Cancellation of Registration.
Section 212. Purchase by Government at Sale Upon (G) Persons Commencing Business.
Distraint. (H) Persons Becoming Liable to the Value-added Tax.
Section 213. Advertisement and Sale. (I) Optional Registration of Exempt Person.
Section 214. Redemption of Property Sold. (J) Supplying of Taxpayer Identification Number (TIN)
Section 215. Forfeiture to Government for Want of Section 237. Issuance of Receipts or Sales or
Bidder. Commercial Invoices.
Section 216. Resale of Real Estate Taken for Taxes. Section 238. Printing of Receipts or Sales or
Section 217. Further Distraint or Levy. Commercial Invoices.
Section 218. Injunction not Available to Restrain Section 239. Sign to be Exhibited by Distiller, Rectifier,
Collection of Tax. Compounder, Repacker and Wholesale
Section 219. Nature and Extent of Tax Lien. Liquor Dealer.
Section 220. Form and Mode of Proceeding in Actions Section 240. Sign to be exhibited by manufacturer of
Arising under this Code. Products of Tobacco.
Section 221. Remedy for Enforcement of Statutory Section 241. Exhibition of Certificate of Payment at
Penal Provisions. Place of Business.
Section 222. Exceptions as to Period of Limitation of Section 242. Continuation of Business of Deceased
Assessment and Collection of Taxes. Person.
Section 223. Suspension of Running of Statute of Section 243. Removal of Business to Other Location.
Limitations. Chaper III. Rules and Regulations
Section 224. Remedy for Enforcement of Forfeitures.
Section 244. Authority of Secretary of Finance to Section 256. Penal Liability of Corporations.
Promulgate Rules and Regulations. Section 257. Penal Liability for Making False Entries,
Section 245. Specific Provisions to be Contained in Records or Reports, or Using Falsified
Rules and Regulations. or Fake Accountable Forms.
Section 246. Non- Retroactivity of Rulings. Section 258. Unlawful Pursuit of Business.
Title X. Statutory Offenses and Penalties Section 259. Illegal Collection of Foreign Payments.
Chaper I. Additions to the Tax Section 260. Unlawful Possession of Cigarette Paper in
Section 247. General Provisions. Bobbins or Rolls, Etc.
Section 248. Civil Penalties. Section 261. Unlawful Use of Denatured Alcohol.
(A) There shall be imposed, in addition to the tax Section 262. Shipment or Removal of Liquor or
required to be paid, a Tobacco Products under False Name or Brand
penalty equivalent to twenty-five percent (25%) of the or as an Imitation of any Existing or Otherwise Known
amount due, in Product Name or Brand.
the following cases: Section 263. Unlawful Possession or Removal of
(1) Failure to file any return and pay the tax due thereon Articles Subject to Excise Tax without
as Payment of the Tax.
required under the provisions of this Code or rules and Section 264. Failure or refusal to Issue Receipts or Sales
regulations on the date prescribed; or or Commercial Invoices, Violations
(2) Unless otherwise authorized by the Commissioner, related to the Printing of such Receipts or Invoices and
filing a Other Violations.
return with an internal revenue officer other than those Section 265. Offenses Relating to Stamps.
with Section 266. Failure to Obey Summons.
whom the return is required to be filed; or Section 267. Declaration under Penalties of Perjury.
(3) Failure to pay the deficiency tax within the time Section 268. Other Crimes and Offenses.
prescribed for Chaper III. Penalties Imposed on Public Officers
its payment in the notice of assessment; or Section 269. Violations Committed by Government
(4) Failure to pay the full or part of the amount of tax Enforcement Officers.
shown on any Section 270. Unlawful Divulgence of Trade Secrets.
return required to be filed under the provisions of this Section 271. Unlawful Interest of Revenue Law
Code or Enforcers in Business.
rules and regulations, or the full amount of tax due for Section 272. Violation of Withholding Tax Provision.
which no Section 273. Penalty for Failure to Issue and Execute
return is required to be filed, on or before the date Warrant.
prescribed Chaper IV. Other Penal Provisions
for its payment. Section 274. Penalty for Second and Subsequent
(B) In case of willful neglect to file the returnfifty Offenses.
percent (50%) of the tax Section 275. Violation of Other Provisions of this Code
or of the deficiency tax or Rules and Regulations in General.
Section 249. Interest. Section 276. Penalty for Selling, Transferring,
(A) In General. Encumbering or in any way Disposing of
(B) Deficiency Interest. Property Placed under Constructive Distraint.
(C) Delinquency Interest. Section 277. Failure to Surrender Property Placed under
(D) Interest on Extended Payment. Distraint and Levy.
Section 250. Failure to File Certain Information Section 278. Procuring Unlawful Divulgence of Trade
Returns. Secrets.
Section 251. Failure of a Withholding Agent to Collect Section 279. Confiscation and Forfeiture of the
and Remit Tax. Proceeds or Instruments of Crime.
Section 252. Failure of a Withholding Agent to refund Section 280. Subsidiary Penalty.
Excess Withholding Tax. Section 281. Prescription for Violations of any
Chaper II. Crimes, Other Offenses and Forfeitures Provision of this Code.
Section 253. General Provisions. Section 282. Informer's Reward to Persons Instrumental
Section 254. Attempt to Evade or Defeat Tax. in the Discovery of Violations of the
Section 255. Failure to File Return, Supply Correct and National Internal Revenue Code and in the Discovery
Accurate Information, Pay Tax and Seizure of Smuggled Goods.
Withhold and Remit Tax and Refund Excess Taxes (A) For Violations of the National Internal Revenue
Withheld on Compensation. Code.
(B) For Discovery and Seizure of Smuggled Goods.
Title XI. Allotment of Internal Revenue
Chaper I. Disposition and Allotment of National
Internal Revenue in General
Section 283. Disposition of National Internal Revenue.
Section 284. Allotment for the Commission on Audit.
Section 285. Allotment for the Bureau of Internal
Revenue.
Chaper II. Special Disposition of Certain National
Internal Revenue Taxes
Section 286. Disposition of Proceeds of insurance
Premium Tax.
Section 287. Shares of Local Government Units in the
Proceeds from the Development and
Utilization of the National Wealth.
(A) Amount of Share of Local Government Units.
(B) Share of the Local Governments from Any
Government Agency or
Government-owned or - Controlled Corporation.
(C) Allocation of Shares.
Section 288. Disposition of Incremental Revenues.
(A) Incremental Revenues from Republic Act No. 7660.
(B) Incremental Revenues from Republic Act No. 8240.
Section 289. Special Financial Support to Beneficiary
Provinces Producing Virginia Tobacco.
Title XII. Oversight Committee
Section 290. Congressional Oversight Committee.
Title XIII. Repealing Provisions
Section 291. In General.
Title XIV. Final Provisions
Section 292. Separability Clause.