BIR Ruling

June 26, 1972 Filmag (Philippines) Inc. 2nd Floor, PDCP Bldg., Ayala Ave. Makati, Rizal Attention: B . Medina Treasurer-Comptroller Gentlemen : This refers to your letter dated February 3, 1972 requesting that you be allowed to pay your income tax "to as many municipalities as are entitled in the manner that we deem just and equitable." It is represented that you are a mining company engaged in beneficiating iron (magnetite) sand along the western cost of Northern Luzon; that you started operating in the shorelines of La Union in 1964 and have moved up to Ilocos Sur, presently mining in the Municipalities of Tagudin, Sta. Cruz and Sta. Lucia; that you have been filing your income tax returns and paying 50% of the corresponding income tax in one municipality and paying the balance in the various municipalities where you operate; and that this income tax sharing among the municipalities is inadequate in meeting your objectives of distributing the benefits thereof to the various municipalities, they being aware of their 20% share of the income tax. aisadc In reply thereto, I have the honor to inform you that pursuant to Section 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 installments, 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. Under the above provisions of Revenue Memorandum Circular No. 19-66, you should pay the first installment of your income tax to the city or municipality where the principal office of your business is located. With regard to the second installment, you may apportion the same to the cities or municipalities where you have branches or factories and pay to each of them the portion allocated. It seems obvious that your proposal is not in accordance with the said circular because it seeks to divide not merely the second installment, but the total amount of income tax among the several municipalities to the prejudice of the municipality where the principal office of your business is located. Accordingly, said proposal cannot be allowed by this Office. Furthermore, in connection with the apportionment of the second installment, payment shall be made in the central office of the Bureau of Internal Revenue in Manila with one check for every city or municipality in whose favor the taxpayer may choose to credit with his tax payment. (Dept. Order No. 29-72) Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue