BIR Ruling No. 044-12

February 9, 2012 BIR RULING NO. 044-12 Secs. 270, 71 of NIRC of 1997; BIR Ruling No. DA-020-03 Office of the Senior Deputy Administrator for Business and Investment Subic Bay Metropolitan Authority Rm. 117 Bldg. 225, Dewey Avenue, Subic Bay Freeport Zone Attention: Stefani C. Sano Senior Deputy Administrator for Business and Investment Group Gentlemen : This refers to your letter dated 31 March 2011 requesting for a list of companies that generated more than thirty percent (30%) of their total income from sources within the Customs Territory for 2010, in relation to Section 44 of the Implementing Rules and Regulations of R.A. 7227. DcSEHT In reply, please be informed that Section 270 of the 1997 Tax Code, as amended, provides: "Sec. 270. Unlawful Divulgence of Trade Secrets. Except as provided in Section 71 of this Code and Section 26 of Republic Act No. 6388, any officer or employee of the Bureau of Internal Revenue who divulges to any person or makes known in any other manner than may be provided by law information regarding the business, income or estate of any taxpayer, the secrets, operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, shall, upon conviction for each act or omission, be punished by a fine of not less than Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000), or suffer imprisonment of not less than two (2) years but not more than five (5) years, or both." In Opinion No. 72, Series of 1991, the Secretary of Justice opined that individual income tax returns under the first paragraph of the aforequoted Section 'shall constitute public records and be open to inspection as such upon the order of the President of the Philippines under rules and regulations to be prescribed . . . by the Secretary of Finance.' The existing rules on inspection of such returns provide that such inspection is allowed only to (a) BIR officials and employees whose official duties require such inspection; (b) the person who made the return, or his duly constituted attorney-in-fact; (c) the administrator, executor, or trustee of the taxpayer's estate or the duly constituted attorney-in-fact of such administrator, executor or trustee, where the maker of the return has died; and (d) in the discretion of the Commissioner of Internal Revenue, one of the heirs of law or next of kin of such deceased person upon showing that he has a material interest which will be affected by the information contained in the return. (BIR Ruling No. DA-020-03 dated January 27, 2003) It is evident from the above provision that under the "unlawful divulgence" rule, BIR personnel cannot divulge information gained from taxpayers concerning the latter's business, income, or estate as well as the secrets, operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer to protect taxpayers from having their otherwise sensitive and private information unnecessarily revealed to other parties. In this case, the information sought to be obtained from this Office does not fall under any of the instances where confidential information of taxpayers may be revealed. Moreover, the requested information relates to the identification and enumeration of companies that generated more than thirty percent (30%) of their total income from sources within the Customs Territory for 2010, although the figures are not stated, which falls under information concerning the income of the taxpayer. Accordingly, this Office is constrained to withhold such information pursuant to Section 270 of the same Tax Code. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue