Place of filing by a BRANCH of its Percentage Tax Returns Covering Gross Receipts or Earnings and Payment of the Tax Due Thereon

November 5, 1982 REVENUE MEMORANDUM CIRCULAR NO. 01-82 SUBJECT : Place of filing by a BRANCH of its Percentage Tax Returns Covering Gross Receipts or Earnings and Payment of the Tax Due Thereon TO : All Internal Revenue Officers and Others Concerned For the information of all concerned, quoted hereunder is the pertinent portion of Section 193 of the Tax Code, as amended by Presidential Decree No. 1773: "Sec. 193. Payment of percentage taxes : "(a) In general. "(2) Where to file . Except in cases where the Commissioner otherwise permits, the percentage tax returns required to be filed in the preceding paragraph shall be filed with the Revenue District Officer, Collection Agent, or duly authorized Treasurer of the Municipality in which such person has his legal residence or principal place of business in the Philippines." (Emphasis supplied) Also quoted hereunder are Sections 4 and 6 of Revenue Regulations No. 6-81 dated January 28, 1981, implementing the above-quoted provisions of the Tax Code: "Sec. 4. Where to file . The percentage tax return shall be filed with the Revenue District Officer, Collection Agent or authorized Municipal Treasurer at the taxpayer's legal residence or principal place of business in the Philippines, or in any other place where the Commissioner may authorize. aisa dc "Sec. 6. When and where to pay the tax . The quarterly and final annual percentage taxes shall be paid upon the filing of the corresponding return to the authorized officer mentioned in Section 4 hereof. Similar provisions govern the filing of the gross receipts tax returns and payment of the tax due from banks, non-bank financial intermediaries and finance companies. (Sec. 6, Revenue Regulations No. 12-80) Considering that a branch is considered a "separate or distinct establishment or place where business subject to tax is conducted" and, therefore, subject to separate privilege tax (Section 188, Tax Code), this Office believes that a branch has its legal residence or principal place of business in its area of business operations so that the said branch has to file its percentage tax return and pay the tax declared therein with the Revenue District Officer, Collection Agent or authorized Municipal Treasurer of the place where said branch is located. For the purpose of effecting compliance with this Circular, the Regional Director of the place where a branch is located should inform said branch that henceforth the percentage tax return covering the gross receipts of the branch should be filed with the above mentioned revenue officials. Under the foregoing provisions of law and regulations, the Commissioner of Internal Revenue may authorize the filing of percentage tax returns and payment of the tax due thereon in any place other than the taxpayer's legal residence or principal place of business. And if the Commissioner authorizes the filing or percentage tax returns in any other place, it shall be mandatory for the taxpayer to file the return therein. The foregoing provisions of this Circular are hereby made applicable to the returns filed by persons subject to percentage tax under Title V of the Tax Code, except those subject to the sales tax under Sections 194, 195, 196, 197, 199 and 201. The returns filed by banks, non-bank financial intermediaries, finance and insurance companies are also covered by this Circular. acd In the case of royalty taxes on minerals and mineral products, the lessee, owner or operator of the mine must file the corresponding return with the Revenue District Officer, Collection Agent or the Treasurer of the city or municipality of the place where the mine is located. (Sec. 256, Tax Code, as amended by Batas Pambansa Blg. 84; Sections 6 and 7, Revenue Regulations No. 13-80) In the case of charges on forest products, the licensee or his authorized agent shall file the log scale report (considered as the return) upon which the correct forest charges shall be based, with the Revenue District Officer, Collection Agent or duly authorized Treasurer of the Municipality of the place where the timber concession is located or where the forest products were gathered and removed. (Sec. 281, Tax Code, as amended by Batas Pambansa Blg. 83; Sec. 7, Revenue Regulations No. 2-81) The Regional Office having the jurisdiction of the place where the branch return is filed shall undertake the examination of said return, but the report of investigation shall be forwarded to the Regional Office having jurisdiction over the taxpayer's main office for purposes of consolidation where the taxpayers are listed as falling within the investigative jurisdiction of Divisions in the National Office, the examination of the branch return shall be made by the National Office, however if there are strong reasons and or evidence to indicate the existence of fraud in the filing of the returns, representations should be made by the Region concerned to have a joint investigation of the branch return with the proper Division of the National Office. casia It is desired that this Circular be given as wide a publicity as possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner