Surcharge for failure to render returns and for rendering false and fraudulent returns.
SEC. 72. Surcharge for failure to render returns and for rendering false and fraudulent returns. — The Collector of Internal Revenue shall assess all income taxes. In case of willful neglect to file the return or list within the time prescribed by law, or in case a false or fraudulent return or list is willfully made, the Collector of Internal Revenue shall add to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, or surcharge of fifty per centum of the amount of such tax or deficiency tax. In case of any failure to make and file a return or list within the time prescribed by law or by the Collector or other internal-revenue officer, not due to willful neglect, the Collector of Internal Revenue shall add to the tax twenty-five per centum of its amount, except that, when a return is voluntarily and without notice from the Collector or other officer filed after such time, and it is shown that the failure to file it was due to a reasonable, cause, no such addition shall be made to the tax. The amount so added to any tax shall be collected at the same time and in the same manner as part of the tax unless the tax has been paid before the discovery of the neglect, falsity or fraud, in which case the amount so added shall be collected in the same manner as the tax.
Penalty for failure to file return or to pay tax.
SEC. 73. Penalty for failure to file return or to pay tax. — Any one liable to pay the tax, to make a return or to supply information required under this code, who refuses or neglects to pay such tax, to make such return or to supply such information at the time or times herein specified in each year, shall be punished by a fine of not more than two thousand pesos or by imprisonment for not more than six months, or both.
Any individual or any officer of any corporation, or general co-partnership (compania colectiva), required by law to make, render, sign, or verify any return or to supply any information, who makes any false or fraudulent return or statement with intent to defeat or evade the assessment required by this code to be made, shall be punished by a fine of not exceeding four thousand pesos or by imprisonment for not exceeding one year, or both.
Penalty imposed on corporations which refuse or neglect to make a return.
SEC. 74. Penalty imposed on corporations which refuse or neglect to make a return. — If any corporation or duly registered general co-partnership shall refuse or neglect to make a return at the time or times hereinbefore specified in each year, or shall render a false or fraudulent return, such corporation or partnership shall be liable to a fine of not exceeding twenty thousand pesos.
SEC. 75. Return of information by corporations; penalty for failure to keep records of stockholders or dividends paid. — Every corporation subject to the tax herein imposed, or otherwise engaged in business or trade within the Philippines, when required by the Collector of Internal Revenue, shall render a correct return, duly verified under oath, of its payments of profits or dividends, whether made in cash or its equivalent or in stock, including the names and addresses of members or stockholders, the paid-up capital or the number of shares owned by each, and the tax years and gains or earnings from which such dividends or profits were derived, in such form as may be prescribed by the Collector of Internal Revenue with the approval of the Secretary of Finance.
Any such corporation which fails to keep records of the names and addresses of its members or stockholders, or the correct amount of profits or dividends paid or credited to each of them, or which fails to furnish the information referred to in this section together with certified copies of its balance sheet, profit and loss statements, and such other financial statements which may be required by the Collector of Internal Revenue, shall pay to the Government an amount equal to ten per centum of the dividends or profits distributed, or, in the absence of information as to the amount of profits or dividends distributed, the additional amount herein required to be paid shall be computed on the net profits or income reported in the income tax returns or shown in the books of such corporation, firm or association. However, resident foreign corporations, fifty-one per centum or more of whose income is derived from sources outside of the Philippines, shall not be liable to the payment of the amount prescribed in this section.
Collection of foreign items.
SEC. 76. Collection of foreign items. — All persons, corporations, or duly registered general co-partnerships (companias colectivas) undertaking for profit or otherwise the collection of foreign payments of interest or dividends by means of coupons, checks, or bills of exchange shall obtain license from the Collector of Internal Revenue, and shall be subject to such regulations enabling the Government to obtain the information required under this Title, as the Secretary of Finance shall prescribe; and whoever knowingly undertakes to collect such payments as aforesaid without having obtained a license therefor, or without complying with such regulations, shall, for each offense, be fined in a sum not exceeding ten thousand pesos or imprisoned for a term not exceeding one year, or both.
Information at source as to payments of one thousand pesos or more.
SEC. 77. Information at source as to payments of one thousand pesos or more. — All persons, corporations, or duly registered 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, and employers, making payment to another person, corporation, or duly registered general co-partnership (compania colectiva), of interests, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income, other than payments described in sections 75 and 79, of one thousand pesos or more in any taxable year, or, in the case of such payments made by the Government of the Philippines, the officers or employees of the Government having information as to such payments and required to make returns in regard thereto, are authorized and required to render a true and accurate return to the Collector of Internal Revenue, under such rules and regulations and in such form and manner as may be prescribed by the Secretary of Finance, setting forth the amount of such grains, profits, and income, and the name address of the recipient of such payment: Provided, That such returns shall be required, regardless of amounts in the case of payments of interest upon bonds and mortgages or deeds of trust or other similar obligations of corporations, and in the case of collections of items, not payable in the Philippines, of interest upon the bonds of foreign countries and interest from the bonds and dividends from the stock of foreign corporations by persons, corporations, or duly registered general co-partnerships (companias colectivas) undertaking as a matter of business or for profit or otherwise the collection of foreign payments of such interest or dividends by means of coupons or bills of exchange.
Return of corporation contemplating dissolution.
SEC. 78. Return of corporation contemplating dissolution. — Every corporation shall, within thirty days after the adoption by the corporation of a resolution or plan for the dissolution of the corporation or for the liquidation of the whole or any part of its capital stock, render a correct return to the collector of Internal Revenue, verified under oath, setting forth the terms of such resolution or plan and such other information as the Secretary of Finance shall, by regulations, prescribe.
Return of information of brokers.
SEC. 79. Return of information of brokers. — Every person, corporation, or duly registered general co-partnership (compania colectiva), doing business as a broker in any exchange or board of trade or other similar place of business shall, when required by the Collector of Internal Revenue, render a correct return duly verified under oath under such regulations as the Secretary of Finance may prescribe, showing the names of customers for whom such person, corporation, or duly registered general co-partnership (compania colectiva), has transacted any business with such details as to the profits, losses, or other information which the collector may require as to each of such customers as will enable the Collector of Internal Revenue to determine whether all income tax due on profits or gains of such customers has been paid.
Returns as to formation, etc., of foreign corporations.
SEC. 80. Returns as to formation, etc., of foreign corporations. — (a) Requirement. — Under regulations prescribed by the Secretary of Finance, any attorney, accountant, fiduciary, bank, trust company, financial institution, or other person who, after the date of the enactment of this Code, aids, assists, counsels, or advises in, or with respect to the formation, organization or reorganization of any foreign corporation, shall, within thirty days thereafter, file with the Collector of Internal Revenue a return.
(b) Form and contents of return. — Such return shall be in such form and shall set forth, under oath, in respect of each such corporation, to the full extent of the information within the possession or knowledge or under the control of the person required to file the return, such information as the Secretary of Finance shall prescribe by regulations as necessary for carrying out the provisions of this Title. Nothing in this section shall be construed to require the divulging of privileged communications between attorney and client.
Disposition of income tax returns; publication of lists of persons filing returns and paying taxes.
SEC. 81. Disposition of income tax returns; publication of lists of persons filing returns and paying taxes. — After the assessment shall have been made, as provided in this Title, the returns, together with any corrections thereof which may have been made by the Collector, shall be filed in the office of the Collector of Internal Revenue and shall constitute public records and be open to inspection as such upon the order of the Philippines under rules and regulations to be prescribed by the Secretary of Finance.
Subject to the approval of the Secretary of Finance, the Collector of Internal Revenue may in each year cause to be prepared and published in any newspaper or made available to public inspection in such manner as he may determine, lists containing the names and addresses of persons who filed income tax returns and/or paid income taxes.
Suit to recover tax based on false or fraudulent returns.
SEC. 82. Suit to recover tax based on false or fraudulent returns. — When an assessment is made in case of any list, statement, or return, which in the opinion of the Collector of Internal Revenue was false or fraudulent, or contained any understatement or undervaluation, no tax collected under such assessment shall be recovered by any suit unless it is proved that the said list, statement, or return was not false nor fraudulent and did not contain any understatement or undervaluation; but this provision shall not apply to statements or returns made or to be made in good faith regarding annual depreciation of oil or gas wells and mines.
Distribution of dividends or assets by corporations.
SEC. 83. Distribution of dividends or assets by corporations. — (a) Definition of dividends. — The terms "dividends" when used in this Title means any distribution made by a corporation to its shareholders out of its earnings or profits accrued since March first, nineteen hundred and thirteen and payable to its shareholders, whether in money or other property.
Where a corporation distributes all of its assets in complete liquidation or dissolution, the gain realized or loss sustained by the stockholder, whether individual or corporate, is a taxable income or a deductible loss, as the case may be.
(b) Stock dividend. — A stock dividend representing the transfer of surplus to capital account shall not be subject to tax. However, if a corporation cancels or redeems stock issued as a dividend at such item and in such manner as to make the distribution and cancellation or redemption, in whole or in part, essentially equivalent to the distribution of a taxable dividend, the amount so distributed in redemption or cancellation of the stock shall be considered as taxable income to the extent that it represents a distribution of earnings or profits accumulated after March first, nineteen hundred and thirteen.
(c) Dividends distributed are deemed made from most recently accumulated profits. — Any distribution made to the shareholders or members of a corporation in the year nineteen hundred and thirty-nine or subsequent tax years, shall be deemed to have been made from the most recently accumulated profits or surplus, and shall constitute a part of the annual income of the distributee for the year in which received: Provided, That nothing herein shall be construed as taxing any earnings or profits accrued prior to March first, nineteen hundred and thirteen, but such earnings or profits may be distributed in stock dividends or otherwise, exempt from the tax, after the distribution of earnings and profits accrued since March first, nineteen hundred and thirteen, has been made.
Source: Official Gazette of the Republic of the Philippines — Philippine laws are public documents (works of the government).
