BIR Ruling

March 19, 1975 The Director of Mines P. O. Box 1595 Manila S i r : This is with reference to your letter dated January 8, 1975 requesting comment of this Office on the draft of the proposed mining service contract required for development of mineral reservations, pursuant to the provisions of Section 8, Paragraph 2 of Presidential Decree No. 463, otherwise known as the "Mineral Resources Development Decree of 1974". In this connection, I have the honor to inform you that this Office has no objection to the provisions of the aforesaid proposed contract, except Paragraph 8.3 of Section VIII thereof which reads as follows: "8.3 CONTRACTOR shall render to the Director a return for each taxable year in duplicate in such form and manner as provided by law setting forth its gross income and the deductions herein allowed. The return shall be filed by the Director with the Commissioner of Internal Revenue or his deputies or other persons authorized by him to receive such return within the period specified in the National Internal Revenue Code and the rules and regulations promulgated thereunder." Under the above-quoted provisions of the service contracts, the Contractor, which is a foreign corporation duly licensed to transact business in the Philippines shall render its income tax return with the Director of Mines who will file the same with the Commissioner of Internal Revenue. Such a procedure is not sanctioned by law. Pursuant to Supplement B, Title II of the Tax Code, corporations shall file quarterly returns of their net taxable income for each of the first three quarters and a final or adjustment return covering the total taxable income for the preceding calendar or fiscal year. Said returns shall be filed with the Commissioner of Internal Revenue, Regional Director, Revenue District Officer or Collection Agent of the city or municipality where the corporation's principal office is located and where its books of accounts and other data from which the return is prepared are kept. In other words, the income tax returns of the Contractor should be filed directly with the Commissioner of Internal Revenue or any of his authorized deputies and not with any other government agency. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5