Liability to the C-13 Graduated Annual Fixed Tax Under P.D. 2006

January 15, 1986 REVENUE MEMORANDUM CIRCULAR NO. 02-86 SUBJECT : Liability to the C-13 Graduated Annual Fixed Tax Under P.D. 2006 TO : All Internal Revenue Officers and Others Concerned Persons or entities engaged in subsequent sale, i.e., sale of domestically acquired article which has not undergone any processing or transformation, are subject to the privilege tax of P200.00 beginning 1986. (Sec. 10, Revenue Regulations No. 1-86) They are also subject to the 1.5% sales tax based on the gross selling price or gross value in money of the articles sold. (Secs. 4 and 5, Ibid ) The question is whether beginning the year 1986, said persons are still subject to the C-13 graduated annual fixed tax imposed by the provisions of Section 162(2) (formerly Section 192(2) ) of the Tax Code. cd The C-13 graduated annual fixed tax payable within the first month of the taxable year adopted by the taxpayer is based on the gross annual sales during the preceding taxable year. It is imposed on a person not required to pay the percentage tax, i.e., a dealer who buys and sells merchandise good and chattel, accordingly, it seems clear that requiring a person to pay the C-13 graduated annual fixed tax appears to be inconsistent with the new requirement that he is subject to the fixed and percentage taxes imposed on subsequent sale of articles. Such being the case, a person subject to fixed and percentage taxes on subsequent sale, is no longer subject to the C-13 graduated annual fixed tax. However, if a person is not subject to tax on subsequent sale, e.g., dealer of agricultural products (rice and corn) he will be subject to the C-13 graduated annual fixed tax. Operators or owners of rice and corn mills as well as dealers of gasoline and/or petroleum products shall be subject to the annual fixed tax prescribed by Sections 161 (3) (nn) and (pp) (formerly Sections 192(3) (nn) and (pp) ) of the Tax Code. casia It is desired that this Circular be given as wide a publicity as possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner