Sworn Statement Required by Republic Act No. 2070

August 27, 1958 BIR RULING NO. 449-58 Messrs. Sycip, Gorres, Velayo & Co. Certified Public Accountants 490 San Luis, Manila Gentlemen : In reply to your letter dated August 21, 1958, I have the honor to inform you as follows: cdt On Individuals 1. The sworn statement required by Republic Act No. 2070 covers a calendar year period. Accordingly, corporations, associations and partnerships must accomplish the statement on the basis of the calendar year even if their accounting period is a fiscal year. Therefore, the partners in a registered general copartnership should declare as their gross income their shares in the profits of the partnership whether divided or not which have accrued as of December 31 of each year. 2. Filipinos who have lost their residence in the Philippines are not required to file a sworn statement, unless they have properties in the Philippines, in which case, their administrators shall file the statement for them. 3. Non-resident alien individuals who have assets in this country and are earning income therein must file the sworn statement thru their administrators. 4. The phrase "executors or administrators of estates" refers to estates of both living and deceased persons. For purposes of the Tax Census Law, trustees are covered within the terms guardians, executors and administrators. Accordingly, a trustee for minors must accomplish the statement. 5. An alien who was a resident of the Philippines as of December 31, 1957 but who thereafter left the country without the intention of returning is not required to file the statement. 6. An alien who became a resident of the Philippines only in 1958 must file the statement even if all his properties as of December 31, 1957 are located abroad. 7. An alien resident must include in his declaration all of his assets as of December 31, 1957 regardless of where they are located, and how and when they were acquired. 8. Information as to the acquisition cost and fair market value of both real and personal properties is required. Consequently, the acquisition cost cannot be substituted for the fair market value. "Fair market value" is defined in the instructions at the back of Form 1.80 as "the estimate of the cost of the property when offered for sale". 9. When only a part of a house is under lease, the other part being used by the owner as residence, the house should be reported as property under lease (item 7 of Form 1.80). 10. In item 13 of Form 1.80, (Personal, family and living expenses), it is sufficient if the "Total for the preceding year" is indicated in the space provided therefor. On Corporations 1. B.I.R. Form 1.81 (for corporations, etc.) must be accomplished on the basis of the calendar and not fiscal year. The fiscal period of an entity cannot be adopted as basis because the law requires the filing of the statement on or before January 31 of each year which cannot possibly be done on the basis of the fiscal period. Accordingly, the entities involved must have to determine their income on the basis of the calendar year, 2. If an entity cannot determine the acquisition costs of its shares of stock by its stockholders, the par value of the shares of stock may be substituted therefor. 3. Foreign corporations licensed to do business in the Philippines whose stockholders are all non-resident aliens need not fill item 7 of the Form, but the fact that their stockholders are all non-resident aliens should be noted therein. LexLib 4. Resident foreign corporation shall fill item 14 (Paid-up capital) by indicating therein the capital invested in their Philippine operations plus profits. Item 13 (Liabilities) refers to liabilities incurred in connection with their operations in the Philippines. Item 15 (Surplus) naturally refers to the difference between capital investment plus profits and the liabilities. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue