BIR Ruling

October 8, 1975 Mr. Marcelino Z. Arsaga Chairman of the Board Prime Cargo Shipping Corp. Suite 402 Continental Bank Bldg. 117 Juan Luna St., Manila S i r : This refers to your letter dated September 5, 1975 requesting information as to whether or not that corporation which is engaged in shipping can appoint as Chief Account the wife of a Director/Officer holding 7% equity in that corporation. It is stated in your letter that the accountant's duties would include supervision and maintenance of the books of the corporation and preparation of the financial statements including supervision over the accounting staff, hence, strictly the duties of an internal accountant; and that you would engage the services of an external accountant for purposes of auditing and rendering independent opinion on your accounts. In reply, I have the honor to inform you that there is no internal revenue law or regulation prohibiting the employment of the spouse of an official of a corporation as accountant of the said corporation. The pertinent provision of the regulation stated that "a certified public accountant whose work is subject to the supervision and control of the taxpayer, or who is employed to keep the books of accounts or to supervise the keeping of the said accounts, cannot audit the latter's books of accounts." (Sec. 2, Revenue Regulation No. V-1). Inasmuch as the wife of a director of the corporation will perform only the duties of an internal accountant, the auditing of the books of the corporation to be perform by the external accountant, her appointment as Chief Accountant does not violate the law and implementing regulations. cdt Very truly yours, (SGD.) EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3