Presidential Decree No. 929 (PD 929) — AMENDING SUB-PARAGRAPH (b) OF SECTION 84 AND SECTION 191 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED.
WHEREAS, local contractors contribute substantially to the
development program of the country;
WHEREAS, local contractors are at a disadvantage in
competitive bidding with foreign contractors in view of limited capital
and financial resources;
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;
WHEREAS, to assist them in achieving competitiveness with
foreign contractors, the joint ventures formed by them should not be
considered an additional income tax tier;
WHEREAS, the corporate income tax is imposed on joint
ventures as well as on the entities composing such joint ventures;
WHEREAS, the 3% 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 sub-contractor;
WHEREAS, the double taxation of gross receipts to a
principal contractor and a sub-contractor also diminishes the
competitive capability of local contractors against foreign contractors;
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:
SECTION 1. Subsection (b), Section 84 of the National
Internal Revenue Code, as amended is hereby further amended to read as
follows:
"(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 partnerships and a joint venture formed
for the purpose of undertaking construction projects.
SEC. 2. Section 191 of the National Internal Revenue Code is
hereby amended by adding thereto the following paragraph:
"The term "gross receipts" shall not include the portion of the
total contract price paid by a principal contractor to a sub-contractor
under a subcontract arrangement which portion shall form Part of the
taxable gross receipt of the latter."
Effectivity.
SEC. 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.
(Sgd.)
FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.)
JACOBO C. CLAVE
Presidential Executive Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
