BIR Ruling

March 13, 1973 Mr. Jose G. Agudo 320-C Mabini Street Sampaloc, Manila S i r : In reply to your letter dated March 5, 1973, requesting opinion on certain questions regarding Presidential Decree Nos. 16 and 23, I have the honor to inform you as follows: 1. In the case of Mr. A who sold real property with original cost of P10,000.00, for P15,000.00 thereby making a profit of P5,000.00, the whole proceeds of the sale amounting to P15,000.00 should be declared and invested in new issues of capital stocks in any of the preferred areas of productive undertaking or utilized in the purchase of new issues of government bonds, securities, debentures and notes enumerated in Section 4 of Revenue Regulations No. 7A-72 dated November 16, 1972 in order to enjoy the exemption from income tax on the gains derived from the transaction under Presidential Decree Nos. 16 and 16-A. 2. If Mr. A avails of the amnesty prescribed by Presidential Decree No. 67, by declaring his previously untaxed income and/or wealth consisting of hoarded cash in the Philippines, and paying 10% tax thereon, he is free to invest said cash in any manner he pleases or invests it in any enterprise of his own choice besides those listed in Section 5(c) of Revenue Regulations No. 15-72. In fact, investment of such cash is not required for purposes of amnesty. The requirement that the cash be invested only in those enterprises listed in said Section 5(c) of the regulations refers only to cash hoarded abroad. If his untaxed income was previously invested in another business locally, to avail of the amnesty, all he has to do is to declare the same and pay 10% thereof. Investment in any of the preferred areas of productive undertaking listed in Section 5(c) of Revenue Regulations No. 15-72 is not required. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue