BIR Ruling No. 421-61

September 21, 1961 BIR RULING NO. 421-61 Messrs. Ross, Selph & Carrascoso P. O. Box 781, Manila Gentlemen : Reference is made to your letter dated September 1, 1961, requesting the opinion of this Office on the following questions: "1. Our client issues in triplicate passenger tickets or airwaybills, which are serially numbered, and they constitute evidence of payment of passage fare or freight. One duplicate copy of all tickets and airwaybills issued by its Manila office are filed and entered in our client's books. We understand that our client is not required to comply with the laws and regulations on issuance and registration of invoices or receipts because the duplicate copies of the tickets and airwaybills are sufficient pursuant to Section 16 of the Bookkeeping Regulations (Revenue Regulations No. V-1). "2. Our client's operations in the Philippines are handled by its Manila office. All receipts and disbursements in this country are entered in loose-leaf reports called Cash Disbursement Reports and Cash Remittance Reports and copies thereof are periodically forwarded to its home office in the United States. Inasmuch as our client's income tax will be computed in accordance with the formula prescribed in Section 163 of the Income Tax Regulations (Revenue Regulations No. 2) and is based on our client's world-wide gross income and expenses, we think it is not necessary for our client to keep in the Philippines the required books of accounts. Furthermore, our client keeps duplicate copies of the passenger tickets and airwaybills and also separate books wherein such sales are entered so that the loose-loaf reports are not necessary for percentage tax purposes. "7. Section 16 of the Bookkeeping Regulations provide that common carriers shall issue passenger and freight tickets on duplicate, the original of which is to be issued to the customer or shipper and the duplicate copy to be retained and filed by the carrier for record purposes. We understand that it is not required that such tickets be approved and registered with the Bureau of Internal Revenue. Please confirm if our understanding is correct." LLpr In reply, I have the honor to inform you as follows: 1. The issuance by your client of passenger tickets and airwaybills which are serially numbered is sufficient compliance with Section 16 of the Bookkeeping Regulations. However, Section 19 of the same Regulations also require that the receipts and airwaybills should first be presented to this Office for approval and registration. 2. As regards your second question please be informed that the requirement under Section 334 of the National Internal Revenue Code that all corporations, companies, partnerships or persons subject to internal revenue tax shall keep books of accounts is mandatory and this Office has no authority to relieve you from complying with this requirement. Moreover, failure to keep the required books of accounts will make your client liable to the penalty imposed in the second paragraph of Section 355 of the Tax Code. The duplicate copies of passenger tickets and airwaybills are also required to be kept to support the entries in the books of accounts. prll Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue