Entries Tagged 'National Internal Revenue Code [RA 8424]' ↓

THE NATIONAL INTERNAL REVENUE CODE OF THE PHILIPPINES
Tax Reform Act of 1997/Republic Act No. 8424

AN ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES

SECTION 1. Short Title – This Act shall be cited as the “Tax Reform Act of 1997″.

SEC. 2. State Policy. – It is hereby declared the policy of the State to promote sustainable economic growth through the rationalization of the Philippine internal revenue tax system, including tax administration; to provide, as much as possible, an equitable relief to a greater number of taxpayers in order to improve levels of disposable income and increase economic activity; and to create a robust environment for business to enable firms to compete better in the regional as well as the global market, at the same time that the State ensures that Government is able to provide for the needs of those under its jurisdiction and care.

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TITLE II
TAX ON INCOME

CHAPTER I
DEFINITIONS

SEC. 22. Definitions – When used in this Title:

(A) The term “person” means an individual, a trust, estate or corporation.

(B) The term “corporation” shall include partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participacion), association, or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating consortium agreement under a service contract with the Government. “General professional partnerships” are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business.

(C) The term “domestic”, when applied to a corporation, means created or organized in the Philippines or under its laws.

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TITLE III

CHAPTER I
ESTATE TAX

SEC. 84. Rates of Estate Tax. – There shall be levied, assessed, collected and paid upon the transfer of the net estate as determined in accordance with Sections 85 and 86 of every decedent, whether resident or nonresident of the Philippines, a tax based on the value of such net estate, as computed in accordance with the following schedule:

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TITLE IV
VALUE-ADDED TAX

CHAPTER I
IMPOSITION OF TAX

SEC. 105. Persons Liable. – Any person who, in the course of trade or business, sells barters, exchanges, leases goods or properties, renders services, and any person who imports goods shall be subject to the value-added tax (VAT) imposed in Sections 106 to 108 of this Code.

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TITLE V
OTHER PERCENTAGE TAXES

SEC. 116. Tax on Persons Exempt From Value-Added Tax (VAT). – Any person whose sales or receipts are exempt under Section 109(z) of this Code from the payment of value-added tax and who is not a VAT-registered person shall pay a tax equivalent to three percent (3%) of his gross quarterly sales or receipts: Provided, That cooperatives shall be exempt from the three percent (3%)gross receipts tax herein imposed.

SEC. 117. Percentage Tax on Domestic Carriers and Keepers of Garages. – Cars for rent or hire driven by the lessee, transportation contractors, including persons who transport passengers for hire, and other domestic carriers by land, air or water, for the transport of passengers, except owners of bancas and owner of animal-drawn two wheeled vehicle, and keepers of garages shall pay a tax equivalent to three percent (3%) of their quarterly gross receipts.

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TITLE VI
EXCISE TAXES ON CERTAIN GOODS

CHAPTER I
GENERAL PROVISIONS

SEC. 129. Goods Subject to Excise Taxes. – Excise taxes apply to goods manufactured or produced in the Philippines for domestic sales or consumption or for any other disposition and to things imported. The excise tax imposed herein shall be in addition to the value-added tax imposed under Title IV.

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TITLE VII
DOCUMENTARY STAMP TAX

SEC. 173. Stamp Taxes Upon Documents, Loan Agreements, Instruments and Papers. – Upon documents, instruments, loan agreements and papers, and upon acceptances, assignments, sales and transfers of the obligation, right or property incident thereto, there shall be levied, collected and paid for, and in respect of the transaction so had or accomplished, the corresponding documentary stamp taxes prescribed in the following Sections of this Title, by the person making, signing, issuing, accepting, or transferring the same wherever the document is made, signed, issued, accepted or transferred when the obligation or right arises from Philippine sources or the property is situated in the Philippines, and the same time such act is done or transaction had: Provided, That whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party who is not exempt shall be the one directly liable for the tax.

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TITLE VIII
REMEDIES

CHAPTER I
REMEDIES IN GENERAL

SEC. 202. Final Deed to Purchaser. – In case the taxpayer shall not redeem the property as herein provided the Revenue District Officer shall, as grantor, execute a deed conveying to the purchaser so much of the property as has been sold, free from all liens of any kind whatsoever, and the deed shall succintly recite all the proceedings upon which the validity of the sale depends.

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TITLE IX
COMPLIANCE REQUIREMENTS

CHAPTER I
KEEPING OF BOOKS OF ACCOUNTS AND RECORDS

SEC. 232. Keeping of Books of Accounts. -

(A) Corporations, Companies, Partnerships or Persons Required to Keep Books of Accounts. – All corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their equivalents: Provided, however, That those whose quarterly sales, earnings, receipts, or output do not exceed Fifty thousand pesos (P50,000) shall keep and use simplified set of bookkeeping records duly authorized by the Secretary of Finance where in all transactions and results of operations are shown and from which all taxes due the Government may readily and accurately be ascertained and determined any time of the year: Provided, further, That corporations, companies, partnerships or persons whose gross quarterly sales, earnings, receipts or output exceed One hundred fifty thousand pesos (P150,000) shall have their books of accounts audited and examined yearly by independent Certified Public Accountants and their income tax returns accompanied with a duly accomplished Account Information Form (AIF) which shall contain, among others, information lifted from certified balance sheets, profit and loss statements, schedules listing income-producing properties and the corresponding income therefrom and other relevant statements.

(B) Independent Certified Public Accountant Defined. – The term “Independent Certified Public Accountant”, as used in the preceding paragraph, means an accountant who possesses the independence as defined in the rules and regulations of the Board of Accountancy promulgated pursuant to Presidential Decree No. 692, otherwise known as the Revised Accountancy Law.

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TITLE X
STATUTORY OFFENSES AND PENALTIES

CHAPTER I
ADDITIONS TO TAX

SEC. 247. General Provisions. -

(a) The additions to the tax or deficiency tax prescribed in this Chapter shall apply to all taxes, fees and charges imposed in this Code. The Amount so added to the tax shall be collected at the same time, in the same manner and as part of the tax.

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