BDO Alba Romeo & Co.

November 4, 2009 BIR RULING [DA-(TAR-011) 647-09] Sec. 46; 47; BIR Ruling No. DA-182-07 BDO Alba Romeo & Co. Certified Public Accountants 7th Floor Multinational Bancorporation Centre 6805 Ayala Avenue, Makati City Attention: Alba Romeo Gentlemen : This refers to your letter dated August 19, 2009 requesting for the approval of your general professional partnership (GPP) change in accounting period from calendar year to fiscal year. IDcHCS It is represented that BDO Alba Romeo & Company is a duly registered professional partnership with the primary purpose of practicing public accounting in accordance with the existing general laws and such other activities as may be incidental, part of, or related thereto; that it has adopted a calendar year basis of accounting for its income; and that it intends to change its accounting period from calendar year to fiscal year in order to align it with the internal reporting of its partners and BDO international. In reply, please be informed that pursuant to Sections 46 and 47 of the 1997 Tax Code, BDO Alba Romeo & Company's request for change in accounting period from the calendar year to fiscal year is granted, provided that BDO Alba Romeo & Company complies with the provisions of Section 47 (a) of the said Tax Code, as amended. Sections 46 and 47 of the 1997 Tax Code provides: "SEC. 46. Change of Accounting Period. If a taxpayer, other than an individual, changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year, or from one fiscal year to another, the net income shall, with the approval of the Commissioner, be computed on the basis of such new accounting period, subject to the provisions of Section 47. SEC. 47. Final or Adjustment Returns for a Period of Less than Twelve (12) Months. (A) Returns for Short Period Resulting from Change of Accounting Period. If a taxpayer, other than an individual, with the approval of the Commissioner, changes the basis of computing net income from fiscal year to calendar year, a separate final or adjustment return shall be made for the period between the close of the last fiscal year for which return was made and the following December 31. If the change is from calendar year to fiscal year, a separate final or adjustment return shall be made for the period between the close of the last calendar year for which return was made and the date designated as the close of the fiscal year. If the change is from one fiscal year to another fiscal year, a separate final or adjustment return shall be made for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year. (B) Income Computed on Basis of Short Period. Where a separate final or adjustment return is made under Subsection (A) on account of a change in the accounting period, and in all other cases where a separate final or adjustment return is required or permitted by rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, to be made for a fractional part of a year, then the income shall be computed on the basis of the period for which separate final or adjustment return is made." This will, therefore, serve as your authority to change your accounting period from the calendar year to fiscal year upon your compliance with the requirement of filing a short period return. CaDSHE This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service