BIR Ruling

August 22, 1967 2nd Indorsement Returned to the Chief, Accounting Division, Manila, the attached papers bearing on the request of the Municipal Mayor, San Fernando, Pampanga, that the second installment of the income tax paid by the Pampanga Sugar Development in Bacolor, Pampanga, be credit by this Office to San Fernando, Pampanga. cdt Pursuant to Sections 46 and 51 of the Tax Code, as implemented by Revenue Memorandum Circular No. 19-66 dated April 11, 1966, a corporation, partnership or association should file its income tax return with, and pay the income tax due therefrom to the Collection Agent of the city or municipality where the principal office of its business is located and its books of accounts are kept. If the tax is payable in installment, i.e., the tax due is in excess of five hundred pesos, the first installment as well as the second installment should be paid to the collection agent of the city or municipality where the return is filed. Where a corporation, partnership, or association has branches or factories in one or more cities or municipalities other than the city or municipality where the principal office of its business is located, it should file its return with, and pay the tax due to the collection agent of the latter. However, the corporation, partnership or association may apportion the second installment among the cities and/or municipalities where it has branches or factories and pay to each of them the portion allocated to them. Accordingly, it appearing that the Pampanga Sugar Development has no branch nor factory in Bacolor, Pampanga, the taxpayer corporation could not legally allocate and pay a portion of the second installment of its income tax to said municipality. In view thereof, this Office believes and so holds that the second installment of the income tax paid by the Pampanga Sugar Development in Bacolor, Pampanga may be credited in favor of the municipality of San Fernando where the taxpayer has its principal office or place of business. (See City of Toledo vs. Commissioner of Internal Revenue et al. Civil Case No. 115-T, CFI of Cebu. Decision rendered on May 31, 1967). cdll Be guided accordingly. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue