Corporate Quarterly Income Tax Returns

November 23, 1973 BIR RULING NO. 031-73 Corporate quarterly income tax returns . 1. The taxable income to be declared for each of the first three (3) quarters consists of the exclusive taxable income for such quarter. This can be gleaned from the provisions of Section 3 of Revenue Regulations No. 12-72 quoted as fellows: "SEC. 3. What should be declared . (a) The net taxable income for the quarter and the income tax due thereon, computed in accordance with the provisions of Title II of the National Internal Revenue Code, shall be declared in the quarterly return. Only the total gross income and deductions for the quarter shall be shown on the quarterly return to determine the net taxable income. "(b) If the results of operations for the quarter would show no amount of tax due, a return should nevertheless be filed." 2. A corporation cannot adopt the Cumulative Taxable Income basis since the same is contrary to the above-quoted provisions of Revenue Regulations No. 12-72. Even the procedure of computing income tax under the so-called Cumulative Taxable Income is contrary to Section 4 of Revenue Regulations No. 12-72 quoted as follows: "SEC. 4. Computation of quarterly income tax . The income tax shall be computed in accordance with the provisions of Title II of the National Internal Revenue Code on the net income for the quarter as follows: "For the portion not exceeding P25,000.00 25% (Representing of the first P100,000.00) "For the portion exceeding P25,000.00 35%." 3. Corporations should close their books quarterly in order to reflect more accurately their income for purposes of the quarterly declarations. 4. As provided in the above-quoted provisions of Section 3 of Revenue Regulations No. 12-72, the quarterly return shall declare the total gross income and deductions for the quarter. Consequently, the corporation engaging in a seasonal business should declare the actual gross income and/or expenses realized or incurred during the quarter. Anyway, all these accounts representing gross income and expenses declared in the quarterly returns will be declared in the final return. 5. Since pre-determined cost of production does not represent actual cost, the use thereof cannot be allowed for purposes of computing taxable income for the first three (3) quarters. However, estimated cost of production which should be as accurate as possible may be allowed.