BIR Ruling

March 20, 1967 The Regional Director Revenue Region No. 14 Bacolod City S i r : This refers to your letter dated January 5, 1966 requesting information on the following: "Query is hereby made whether a domestic corporation which declared cash dividends in a taxable year but failed to submit BIR Form No. 17.01-B as required under Section 75 of the Tax Code, is liable to pay to the government the amount equal to 10% of the dividends so declared? Does the same ruling apply if the dividends distributed were in stock?" cdta In reply, I have the honor to inform you that under Section 75 of the Tax Code as amplified by Section 241 of the Income Tax Regulations, every domestic or resident foreign corporation except resident foreign corporations, fifty-one per centum (51%) or more of whose income is derived from sources outside of the Philippines, is required to render a return, in duplicate, on the form prescribed for corporations (BIR Form No. 17.02) of its payments of profits or dividends whether made in cash or its equivalent or in stock, to stockholders for the taxable year or period covered by the return, stating the name and address of each stockholder, the number and class of shares owned by him, the date and amount of such dividend paid him, and when the surplus out of which it was paid was accumulated. Such return should be verified by the oath or affirmation of the person rendering the same. 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 aforementioned information shall pay to the Government an amount equal to ten per centum (10%) 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. It is quite clear from the foregoing that a corporation which fails to furnish the information prescribed by Section 75 shall be liable to pay to the Government 10% of the dividends so declared be they in cash or stock. Be guided accordingly. cdti Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue