BIR Ruling [DA-067-98]

February 26, 1998 BIR RULING [DA-067-98] SyCIP Gorres Velayo & Co 6760 Ayala Avenue 1226 Makati City Attention: Atty . C . P . Noel Tax Division Gentlemen : This refers to your letter dated September 12, 1997 requesting on behalf of your client, Pangasinan Electric Corporation (PEC ), that it be allowed to change its accounting period from fiscal-year to calendar-year basis. LLjur It is represented that the proposed change would synchronize PEC's accounting period with that of its parent company which follows the calendar year and thus, facilitate audit consolidation, among others; that towards the aforesaid goal, the By-laws of PEC have been amended to embody such desired amendment as evidenced by the attached copy of the SEC Approval of the amendment; that pursuant to the requirements for a change in the accounting period provided in Section 172 of the Income Tax Regulations, PEC proposes to change its preset accounting period which ends on June 30 to one which adopts a calendar year ending December 31; that accordingly, PEC's new calendar year shall start on January 1, 1998; that a short period return covering July 1, 1997 to December 31, 1997 will be filed on or before April 15, 1998; that the books of accounts of PEC for the past three years were opened every July 1 and closed every June 30 as shown in its Income Tax Returns filed for the past three (3) years; and that for the same period, PEC's taxable year started July 1, and ended every June 30. In reply, please be informed that we are granting your request in accordance with the provisions of then Section 40 of the Tax Code, as amended (now Sec. 41, of the Tax Code of 1997), as then implemented by Section 172 of the Income Tax Regulations, subject to the provisions of then Sec. 41(a) of the Tax Code, as amended (now Sec. 47(A) of the Tax Code of 1997). Accordingly, a separate final or adjustment return covering your operations for the period July 1, 1997 to December 31, 1997 should be filed with the Revenue District Office concerned on or before April 15, 1998 and the tax due thereon paid at the time of filing. Thereafter, your annual income tax return covering the 12-month period from January 1, 1998 to December 31, 1998 should be filed on or before April 15 following the close of such calendar year and the tax due thereon paid at the time of filing. Nevertheless, you are also required to file your quarterly corporate income tax returns and the requirements of then Sections 45(a), 68, 69 and 70 of the Tax Code, as amended (now Secs. 52(A), 75, 76 and 77 of the Tax Code of 1997), should be complied with. A copy of this letter should be attached to the separate final or adjustment income tax return to be filed by you. (BIR Ruling No. 200-97 dated May 9, 1997) cd Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)