BIR Ruling

July 26, 1972 Mr. Elpidio S. Espiritu 1281 Int. 63 Tambunting Ext. Sta. Cruz, Manila S i r : In reply to your letter dated November 15, 1972, I have the honor to inform you as follows: A person engaging in the bakery business is a manufacturer subject to the P50.00 annual fixed tax imposed in Section 182(A)(1) of the Tax Code, as amended, and his sales of bakery products is subject to the 7% sales tax prescribed in Section 186 of the same Code. The 7% sales tax is payable monthly to the BIR collection Agent, the same to be made within twenty days after the end of each month (Sec. 183(a) Tax Code) cdta Under Section 13 of Revenue Regulations V-1, otherwise known as Bookkeeping Regulations, a book of inventories is required to be kept in which the taxpayer shall record in detail the quantity of materials, supplies, and other goods found in the premises of his establishment at the time he started his business and at the close of the calendar year or accounting period. The inventory of the beginning shall be made and submitted to the Office of the Revenue District Officer or Revenue Director, as the case may be, within ten (10) days after securing the privilege tax receipt or starting the business and the subsequent inventories not later than thirty (30) days after the close of the calendar year or accounting period. With regard to the time and manner of inspection and examination of books of accounts, please be informed that under Section 337 of the Tax Code, all books of accounts including the subsidiary books and other accounting records shall be preserved for a period of at least five (5) years from the last entry in each book and shall be subject to examination and inspection only once in a taxable year during that five-year period by internal revenue officers, except in cases of fraud, irregularity or mistake as determined by the revenue regional director, or unless the taxpayer requests otherwise, in which case, another examination or inspection may be made. Books of accounts are open to examination and inspection by internal revenue officers when properly authorized by the Commissioner of Internal Revenue or the Revenue Director. The authorization is contained in the letter of authority issued by the said revenue officials and addressed to the taxpayer. Attached to the letter of authority is the original copy of the taxpayer's tax return. The taxpayer has the right to refuse examination if the internal revenue officer concerned fails to show a letter of authority. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue