Individual returns.
SEC. 45. Individual returns. — (a) Requirement. — (1) Every citizen of the Philippines of lawful age, whether residing at home or abroad and, (2) every person residing in the Philippines, though not a citizen thereof, having a gross income of one thousand pesos or over, including dividends, for the taxable year, and (3) every non-resident, alien deriving income from sources within the Philippines regardless of amount, shall file an income tax return, in duplicate, setting forth specifically the gross amount of income from all sources and deducting from the total thereof the aggregate items of allowances authorized under this Title, in such form and manner as the Collector of Internal Revenue, with the approval of the Secretary of Finance, may prescribe.
(b) Where to file. — The return shall be filed with the Collector of Internal Revenue, provincial revenue agent or treasurer of the province, city, or municipality in which such person has his legal residence or principal place of business, or if there be no legal residence or place of business in the Philippines, then with the Collector of Internal Revenue in Manila.
(c) When to file. — The return shall be filed on or before the first day of March of each year covering income of the preceding calendar year, or within the extension which may be granted by the Collector of Internal Revenue as herein set forth.
(d) Husband and wife. — In the case of married persons, whether citizens, resident or non-resident aliens, only one consolidated return for the taxable year shall be filed by either spouse to cover the income of both spouses; but where it is impracticable for the spouses to file one consolidated return, each spouse may file his separate return of income, but the returns so filed shall be consolidated for the purpose of the tax prescribed under this Title.
(e) Return of parent to include income of children. — The income of unmarried minors derived from property received from a living parent shall be included in the return of the parent, except (1) when the gift tax has been paid on such property, or (2) when the transfer of such property is exempt from the gift tax.
(f) Persons under disability. — If the taxpayer is unable to make his own return, the return may be made by his duly authorized agent or representative or by the guardian or other person charged with the care of his person or property, the principal and his representative or guardian assuming the responsibility of making the return and incurring penalties provided for erroneous, false, or fraudulent returns.
(g) Signature presumed correct. — The fact that an individual's name is signed to a filed return shall be prima facie evidence for all purposes that the return was actually signed by him.
Corporation returns.
SEC. 46. Corporation returns. — (a) Requirement. — Every corporation, subject to the tax herein imposed, shall render, in duplicate, a true and accurate return of its annual net income in the manner and form prescribed by the collector of Internal Revenue with the approval of the Secretary of Finance, and containing such facts, data and information as are appropriate and in the opinion of the Collector of Internal revenue necessary to determine the correctness of the net income returned and to carry out the provisions of this Title. The return shall be filed by the President, vice-president, or other principal officer, and shall be sworn to by such officer and by the treasurer or assistant treasurer.
(b) When to file. — The return shall be rendered on or before the first day of March of each year for the preceding calendar year, or if the corporation has designated fiscal year, then within sixty days after the close of such fiscal year.
(c) Where to file. — The return shall be made to the Collector of Internal Revenue, provincial revenue agent, or to the treasurer of the province, city, or municipality in which is located the principal office of the corporation where its books of account and other data from which the return is prepared are kept, or in the case of a foreign corporation, to the Collector of Internal Revenue, provincial revenue agent, or to the treasurer of the province city, or municipality in which is located its principal place of business in the Philippines, or if it has no office of any kind or agency in the Philippines, then to the Collector of Internal Revenue in Manila. All such returns shall as received be transmitted forthwith by the officer receiving them to the Collector of Internal Revenue:
(d) Fiscal year of corporations. — Every corporation subject to tax, including duly registered general co-partnerships, may designate the last day of any month in the year as the day of the closing of its fiscal year, and shall be entitled to have the tax payable by it computed upon the basis of the net income ascertained as herein provided for the year ending on the day so designated in the year preceding the date of assessment instead of upon the basis of the net income for the calendar year preceding the date of assessment; and it shall give notice of the day it has thus designated as the closing of its fiscal year to the Collector of Internal Revenue at any time not less than thirty days prior to the first day of March of the year in which its return would be filed if made upon the basis of the calendar year.
Extension of time to file returns.
SEC. 47. Extension of time to file returns. — The Collector of Internal Revenue may, in meritorious cases, grant a reasonable extension of time for filing returns of income.
Returns of receivers, trustees in bankruptcy, or assignees.
SEC. 48. Returns of receivers, trustees in bankruptcy, or assignees. — In cases wherein receivers, trustees in bankruptcy, or assignees are operating the property or business of a corporation, subject to the tax imposed by this Title, such receivers, trustees, or assignees shall make returns of net income as and for such corporation, in the same manner and form as and for such corporation, in the same manner and form as such organization is hereinbefore required to make returns, and any tax due on the income as returned by receivers, trustees, or assignees shall be assessed and collected in the same manner as if assessed directly against the organizations of whose businesses or properties they have custody and control.
Returns of duly registered general co-partnership.
SEC. 49. Returns of duly registered general co-partnership. — Every duly registered general co-partnership (compania colectiva) shall render, in duplicate, a return of its earnings, profits, and income, except income exempt under subsection (b) of section 29 of this Title, setting forth the items of the gross income and the deductions allowed by the Code, and the names and addresses of individuals who would be entitled to the next earnings, profits and income, if distributed.
Returns to be verified by oath.
SEC. 50. Returns to be verified by oath. — The Collector of Internal Revenue or other internal-revenue officer shall require every return to be verified by the oath of the party rendering it. If the Collector or other internal-revenue officer has reason to believe that the amount of any income returned is understated, he shall give due notice to the person, making the return to show cause why the amount of income declared in the return should not be increased, and, upon proof of the amount understated, may increase the same accordingly. Such person may furnish sworn testimony to prove any relevant facts, and, if dissatisfied with the decision of an internal revenue officer, may appeal to the Collector of Internal Revenue for his decision under such rules of procedure as may be prescribed by regulations.
Assessment and payment of income tax.
SEC. 51. Assessment and payment of income tax. — (a) Assessment of tax. — All assessments shall be made by the Collector of Internal Revenue and all persons and corporations subject to tax shall be notified of the amount for which they are respectively liable on or before the first day of May of each successive year.
(b) Time of payment. — The total amount of tax imposed by this Title shall be paid on or before the fifteenth day of May following the close of the calendar year, by the person subject to tax, and, in the case of a corporation, by the president, vice-president, or other responsible officer thereof. If the return is made on the basis of a fiscal year, the total amount of the tax shall be paid on or before the fifteenth day of the fifth month following the close of the fiscal year.
(c) Installment payments. — When the tax assessed against the taxpayer is in excess of ten pesos, the taxpayer may elect to pay the tax in two equal installments in which case the first installment shall be paid on or before the date prescribed in the preceding subsection, and the second installment, on or before the fifteenth day of August following the close of the calendar year, or on or before the fifteenth day of the eight month following the close of the fiscal year, as the case may be. If any installment is not paid on or before the date fixed for its payment, the whole amount of tax unpaid shall be paid upon notice and demand from the Collector of Internal Revenue.
(d) Refusal or neglect to make returns; fraudulent returns etc. — In cases of refusal or neglect to make a return and in cases of erroneous, false, or fraudulent returns, the Collector of Internal Revenue shall, upon the discovery thereof, at any time within three years after said return is due, or has been made, make a return upon information obtained as provided for in this code or by existing law, or require the necessary corrections to be made, and the assessment made by the Collector of Internal Revenue thereon shall be paid by such person or corporation immediately upon notification of the amount of such assessment.
(e) Surcharge and interest in case of delinquency. — To any sum or sums due and unpaid after the dates prescribed in subsections (b), (c) and (d) for the payment of the amount of tax unpaid and interest at the rate of one per centum a month upon said tax from the time the same became due, except from the estates of insane, deceased, or insolvent persons.
Receipts for payments made.
SEC. 52. Receipts for payments made. — It shall be the duty of the Collector of Internal Revenue or other internal revenue officer to whom any payment of any taxes is made under the provisions of this Title, to give to the person making such payment a full written or printed receipt, expressing the amount paid and the particular account for which such payment was made; and whenever such payment is made, such Collector or other officer shall, if required, give a separate receipt for each tax paid by any debtor, on account of payments made to or to be made by him to separate creditors in such form that such debtor can conveniently produce the same separately to his several creditors in satisfaction of their respective demands to the amounts specified in such receipts; and such receipts shall be sufficient evidence in favor of such debtor to justify him in withholding the amount therein expressed from his next payment to his creditor; but such creditor may, upon giving to his debtor a full written receipt, acknowledging the payment to him of whatever sum may be actually paid, and accepting the amount of tax paid as aforesaid, specifying the same as a further satisfaction of the debt to that amount, require the surrender to him of such Collector's or other officer's receipt.
Withholding of tax at source.
SEC. 53. Withholding of tax at source. — (a) Tax-free covenant bonds. — (1) Requirement of withholding. — In any case where bonds mortgages, deeds of trust, or other similar obligations of domestic or resident foreign corporations, contain a contract or provision by which the obligor agrees to pay any portion of the tax imposed by this Title upon the obligee or to reimburse the obligee for any portion of the tax or to pay the interest without deductions for any tax which the obligor may be required or permitted to pay thereon or to retain therefrom under any law of the Philippines, or of any state or country, the obligor shall deduct and withhold a tax equal to eight per centum of the interest upon such bonds, mortgages, deeds of trust, or other obligations, whether such interest is payable annually or at shorter or longer periods, and whether such bonds, obligations, or securities had been heretofore or are hereafter issued or marketed, and the interest thereon paid, within or without the Philippines if such interest is payable to a non-resident alien individual or to a citizen or resident of the Philippines.
(2) Benefit of exemptions against net income. — Such deduction and withholding shall not be required in the case of a citizen or resident entitled to receive such interest if such person shall be filed with the withholding agent, on or before February first, a signed notice in writing claiming the benefit of the exemption provided in section 23 of this Title.
(b) Non-resident aliens. — All persons, corporations, and general co-partnerships (companias colectivas), in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees acting in any trust capacity, executors, administrators, receivers, conservators, fiduciaries, employers and all officers and employees of the Government of the Philippines having the control, receipt, custody, disposal, or payment of interests, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income of any non-resident alien individual, not engaged in trade or business within the Philippines and not having any office or place of business therein shall (except in the cases provided for in subsection (a) of this section) deduct and withhold from such annual or periodical gains, profits, and income a tax equal to eight per centum thereof: Provided, That no such deduction or withholding shall be required in the case of dividends paid by a foreign corporation unless (1) such corporation is engaged in trade or business therein, and (2) more than eighty-five per centum of the gross income of such corporation for the three-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence) was derived from sources within the Philippines as determined under the provisions of section 37: Provided, further, That the Collector of Internal Revenue may authorize such tax to be deducted and withheld from the interest upon any securities the owners of which are not known to the withholding agent.
(c) Return and payment. — Every person required to deduct and withhold any tax under this section shall make return thereof, in duplicate, on or before March first of each year, and, on or before the time fixed by law for the payment of the tax, shall pay the amount withheld to the officer of the Government of the Philippines authorized to receive it. Every such person is made personally liable for such tax, and is indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this section.
(d) Income of recipient. — Income upon which any tax is required to be withheld at the source under this section shall be included in the return of the recipient of such income but any amount of tax so withheld shall be credited against the amount of income tax as computed in such return and the amount, if any, by which the income tax collected at source exceeds the tax due on the return shall be refunded subject to the provisions of section 309.
(e) Tax paid by recipient. — If any tax required under this section to be deducted and withheld is paid by the recipient of the income, it shall not be re-collected from the withholding agent; nor in cases in which the tax is so paid shall any penalty be imposed upon or collected from the recipient of the income or the withholding agent for failure to return or pay the same, unless such failure was fraudulent and for the purpose of evading payment.
Payment of corporation income tax at source.
SEC. 54. Payment of corporation income tax at source. — In the case of foreign corporations subject to taxation under this Title not engaged in trade or business within the Philippines and not having any office or place of business therein, there shall be deducted and withheld at the source in the same manner and upon the same items of income as is provided in section 53 a tax equal to eight per centum thereof, and such tax shall be returned and paid in the same manner and subject to the same conditions as provided in that section.
Tax on profits collectible from owner or other persons.
SEC. 55. Tax on profits collectible from owner or other persons. — The tax imposed under this Title upon gains, profits, and income not falling under the foregoing and not returned and paid by virtue of the foregoing or as otherwise provided by law shall be assessed by personal return under rules and regulations to be prescribed by the Secretary of Finance. The intent and purpose of this Title is that all gains, profits, and income of a taxable class, as defined in this Title, shall be charged and assessed with the corresponding tax prescribed by this Title, and said tax shall be by the owner of such gains, profits, and income, or the proper person having the receipt, custody, control, or disposal of the same. For the purpose of this Title ownership of such gains, profits and income or liability to pay the tax shall be determined as of the year for which a return is required to be rendered.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
