Repeal of Section 24(e) of the National Internal Revenue Code

January 9, 1984 REVENUE MEMORANDUM CIRCULAR NO. 01-84 SUBJECT : Repeal of Section 24(e) of the National Internal Revenue Code TO : All Internal Revenue Officers and Others Concerned For the information of all concerned Batas Pambansa Blg. 399 is hereby reproduced: "[Batas Pambansa Blg. 399] AN ACT ABOLISHING THE ADDITIONAL TEN PERCENT TAX ON THE TAXABLE NET INCOME OF CLOSELY-HELD CORPORATIONS, REPEALING FOR THE PURPOSE PARAGRAPH (e) OF SECTION TWENTY-FOUR OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED. Sec. 1. Paragraph (e) of Section twenty-four of the National Internal Revenue Code, as amended, is hereby repealed. Sec. 2. This Act shall take effect upon its approval. Approved. (SGD.) QUERUBE C. MAKALINTAL Speaker This Act was passed by the Batasang Pambansa on February 21, 1983. (SGD.) ANTONIO M. DE GUZMAN Secretary-General Approved: May 19, 1983 (Sgd.) FERDINAND E. MARCOS President of the Philippines" Features of the Batas Pambansa Batas Pambansa Blg. 399 repealed the provisions of paragraph (e) of Section 24 of the National Internal Revenue Code which impose additional 10% tax on taxable net income of closely-held corporations. Applicability and Effectivity The abolition of the additional 10% tax took effect on May 19, 1983, the date of approval of Batas Pambansa Blg. 399. Since the income tax is an annual tax based either on a calendar or a fiscal year depending on the taxpayer's annual accounting period, the repeal of the corporate development tax shall be interpreted to be effective for taxable years beginning after May 19, 1983. Accordingly, corporations otherwise qualifying as "closely-held corporations" whose taxable year ends after May 13, 1983 are no longer subject to the provisions of Section 24 (e) of the Tax Code. Corporations otherwise qualifying as "closely-held corporations" whose fiscal year ends before May 19, 1983 are still liable to pay the corporate development tax. acd Enforcement and Publicity All Revenue Officers and others concerned are enjoined to observe the provisions of this Revenue Memorandum Circular and give the same as wide a publicity as possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner