Terms "Net Income" and "Net Profit" as Used in RA No. 2698

December 12, 1960 BIR RULING NO. 535-60 Stewart, Cunanan & Co. 107 18th Street, Port Area M a n i l a Gentlemen : In reply to your query, I have the honor to inform you that the terms "net income": and "net profit" as used in Republic Act No. 2698 have the same meaning. For purposes of the percentage depletion, net income or net profit means the taxable income from the property. Net income (computed without allowance for depletion) means the "gross income from the property" less the allowable deductions attributable to the mineral property upon which the depletion is claimed and the allowable deductions attributable to the treatment process insofar as they relate to the product of such property, including overhead and operating expenses, development costs properly charge to expense, depreciation, taxes, losses sustained, etc. Deductions not directly attributable to particular properties or processes shall be fairly allocated. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue