Publishing Department Order No. 3-71 of the Department of Foreign Affairs dated 29 December 1970 on the Collection of Internal Revenue Taxes Abroad

January 25, 1971 REVENUE MEMORANDUM CIRCULAR NO. 03-71 SUBJECT : Publishing Department Order No. 3-71 of the Department of Foreign Affairs dated 29 December 1970 on the Collection of Internal Revenue Taxes Abroad TO : All Revenue Attaches, Revenue Regional Directors, District Revenue Officers, Collection Agents, Cash Clerks, and all others concerned Quoted hereunder is Department Order No. 3-71 dated December 29, 1970 of the Secretary of the Department of Foreign Affairs, concurred in by the Secretary of the Department of Finance on January 6, 1971, the subject matter of which is "Collection of Internal Revenue Taxes Abroad" issued for the guidance of all concerned: "Republic of the Philippines DEPARTMENT OF FOREIGN AFFAIRS Manila "Manila, 29 December 1970 "DEPARTMENT ORDER NO. 3-71 "SUBJECT: Collection of Internal Revenue Taxes Abroad "SECTION 1. Request of the Secretary of Finance . Concurring with the recommendation of the Commissioner of Internal Revenue, the Secretary of Finance, in his 1st indorsement dated January 30, 1968, requested "that Revenue Attaches be authorized to accept payments of internal revenue taxes in their respective places of assignments and to issue the corresponding official receipts therefor, and that in case there is no revenue attach assigned, an embassy or consular official designated by the head of the embassy or consulate be authorized to accept said payments as well as issue corresponding official receipts". "SEC. 2. Implementation . By virtue of its administrative supervision over all civil attaches when assigned and serving abroad, Revenue Attaches are hereby directed to accept payments of internal revenue taxes, issue to payors the corresponding official receipts prescribed exclusively for the use of the Bureau of Internal Revenue and submit directly their collection accounts to the Commissioner of Internal Revenue, including the remittance of funds covering their collections. The following other implementing details shall be observed: (a)Whenever a revenue attach will be on official business out of his office in his post of assignment, he shall I.inform in writing the supervising principal officer of the post where he is going and furnish him with his itinerary of travel; II.carry along with him such papers as would be necessary to facilitate his collection of revenue taxes; III.get the consent of the principal officer to deputize the finance officer/cashier of the post, or any other responsible subordinate staff officer or employee, if the attach has no assistant provided by his mother agency, to receive for him, and in his behalf payments of revenue taxes; and IV.instruct his deputy on what he will do in the disposition of official matters, especially with respect to processing of papers used as basis in the collection of revenue. (b)Upon his issuance of an assessment notice, a copy thereof should be transmitted to the head of the Office nearest to the forwarding address of the taxpayer with a request to follow up the notice with a view to effecting the collection of the tax. "SEC. 3. Computations . Whenever the tax collectible is in pesos, its foreign exchange equivalent shall be computed as follows: (a)Compute its US dollar equivalent at P6.50 to $1.00 unless otherwise directed in writing. (b)Compute the local currency equivalent of the resulting amount in US dollars at the current prevailing rate of foreign exchange at the time of the transaction. (c)Add to the resulting amount at least 2% for bank charges which will be more or less the amount that would be spent in purchasing foreign exchange to cover the remittance of the collection to Manila. "SEC. 4. Payments by Checks . Whenever any tender of payment is to be acknowledged by the Revenue Attach, checks should be drawn in favor of the Commissioner of Internal Revenue unless the payment is in cash in pesos, if the payor is a Filipino citizen, U.S. dollar or equivalent local currency. Payments may be in peso checks or bank drafts drawn against any bank in Manila. Whenever payments by either cash or checks are to be receipted by diplomatic missions or consular establishments through their respective finance officers/cashiers, the tenders of payment shall be in either U.S. dollars or in local currency. If payments by checks will be preferred, the checks shall be drawn invariably in favor of the receiving establishment. But if the payor insists on paying by check in Philippine currency, then the check should be in favor of the Commissioner of Internal Revenue and no official receipt will be issued. If desired by the payor, a memorandum receipt, to be superseded later by an official receipt of the Bureau of Internal Revenue, shall be issued. The check and the pertinent papers as basis for the payment of the tax shall at once be transmitted, through the Department, to the Commissioner of Internal Revenue with a request that official receipt be issued by return mail, c/o the sending foreign service establishment which will in turn transmit the official receipt to the payor. The taxpayer shall be duly advised of this action. "SEC. 5. Use of Diplomatic Pouch . All Revenue Attaches may avail of the use of the diplomatic pouch service of any Philippine foreign service establishment in sending his correspondence and reports to the Commissioner of Internal Revenue provided he deposits first with the finance officer/cashier of the post his share of the corresponding charges for handling and freightage. This can be easily determined by finding the weight of the materials to be sent. Only official correspondence and reports, which shall be listed in a manifest by the Revenue Attach, shall be accepted for inclusion in the diplomatic pouch. "SEC. 6. Instructions to Finance Officers/Cashiers . The finance officer/cashier of any Philippine foreign service establishment, in the absence of a regularly assigned Revenue Attach at the post, is hereby instructed to accept any payment of internal revenue taxes upon presentation to him of assessment notice or any other Bureau of Internal Revenue document, like an income tax return, as basis for the acceptance of payment of revenue taxes. Administrative officers of any post concerned, however, shall first process pertinent papers before issuing a directive to the finance officer/cashier to accept the payment. The finance officer/cashier concerned shall observe strictly the following instructions: (a)Reserve for this purpose one booklet of Official Receipts, Department of Foreign Affairs Form No. 39. (b)Insert after every blank original receipt an onion skin sheet of paper of the same size of the official receipt. (c)Before actually issuing an official receipt, see to it that a carbon paper is on top of this onion skin sheet of paper so impressions thereon of writings on the original will appear clearly. (d)Before proceeding to write out an official receipt, write down legibly the complete serial number below the printed number so the said number will appear on the onion skin sheet of paper which will hereafter be referred to as the "extra" copy of the official receipt. (e)As usual, write down clearly and legibly the full name of the payor and his forwarding address and, if available, his taxpayer account number. (f)When the space under the caption "Other Collections" is insufficient for indicating particulars of the amount being paid for, use the upper blank portions of the receipt and indicate always the assessment number or reference to any document as authority for the issuance of the official receipt. (g)If space in the official receipt will not be enough, a typewritten signed memorandum by the processing officer, prepared in quadruplicate, shall be appended to the official receipt and reference to it shall be made more or less as follows: For income taxes due, surcharges and penalties included, Assessment Notice No. ______ per details appended hereto ______ $________. (h)Pertinent particulars of collections shall be entered in the official cash book of the accountable officer and the amounts collected shall be treated and recorded similarly like his ordinary collections. (i)The collections shall be transcribed in quadruplicate in one separate Abstract of Receipts, FA Form No. 88, and submitted to the Department of Foreign Affairs in triplicate. (j)The triplicate copy shall be supported invariably with the "extra" copy of the official receipt. (k)Before closing the collection and disbursement accounts for each month, a cash voucher shall be drawn, regardless of the total amount involved, in favor of the Commissioner of Internal Revenue; the amount thereof shall be equal to the total of the abstract of receipts mentioned in paragraph (i) hereof. (l)A dollar check of the post corresponding to the amount of the cash voucher and bearing the same date thereof shall be drawn in favor of the Commissioner of Internal Revenue. (m)The principal officer of the post shall prepare a transmittal letter addressed to the Commissioner of Internal Revenue, through the Secretary of Foreign Affairs, enclosing the following: 1.The cheek mentioned in paragraph (1) hereof; 2.The triplicate abstract of receipts duly signed and certified correct by the accountable officer; 3.The "extra" copies of official receipts; 4.The Bureau of Internal Revenue documents used as basis in effecting collections; and 5.Other pertinent papers or documents to enable the Bureau of Internal Revenue to account intelligently the collections of the post in its behalf. (n)As soon as one pad of official receipts used exclusively for the collection of revenue taxes and before starting to use another pad, the triplicate official receipts, which must remain intact and not detached from the pad, shall be transmitted by a covering letter to the Commissioner of Internal Revenue through the Secretary of Foreign Affairs. (o)Bureau of Internal Revenue documents like income tax returns, shall invariably bear a notation, over the signature of the accountable officer, showing the number, amount and date of the official receipt issued for the tax collected as shown in the said documents. (p)Whenever possible, signed carbon copies of Bureau of Internal Revenue documents used as basis in the collection of taxes, shall be retained by the accountable officer to form part of his permanent records. "SEC. 7. Accounting Instructions . Regarding the collections and disbursements of finance officers/cashiers, they shall be accounted in the Home Office in the same manner as their regular monthly account returns. The collections shall be booked as accounts payable in favor of the Bureau of Internal Revenue and the credit to this account shall be offset by the booking of the disbursement of the remittance directed in Section 6, paragraphs (k) and (l) thereof. The accounting of the collection accounts of the revenue attaches shall be in accordance with the applicable regulations of the Bureau of Internal Revenue. "SEC. 8. Collection Rate . The collection rate computed in the manner prescribed in Section 3 hereof shall govern exclusively in the matter of collecting revenue taxes and all regulations or instructions contrary to this Department Order are hereby made inapplicable. "SEC. 9. Assistance of Revenue Attaches . Revenue Attaches shall extend full assistance to chiefs of missions and principal consular officers, more particularly to finance officers/cashiers and other personnel of foreign service establishments concerned, with a view to carrying out effectively the purposes and intentions envisioned in the promulgation of these regulations especially those contained in a letter dated December 26, 1967, of the Commissioner of Internal Revenue addressed to the Secretary of Foreign Affairs through the Secretary of Finance. "SEC. 10. Clarifications . Any other matter which need clarification, or whenever special instructions are needed because they are not covered by the regulations herein promulgated, should be taken up by correspondence with the Commissioner of Internal Revenue through the Secretary of Foreign Affairs. "SEC. 11. Repealing Clause . This Department Order amends, modifies or repeals any prior instructions, regulations and orders contrary to the provision hereof. "SEC. 12. Effectivity . This Order shall take effect immediately after it is concurred in by the Secretary of Finance and after a copy hereof is received by the Philippine Foreign Service establishment called upon to implement the regulation herein promulgated. (SGD) CARLOS P. ROMULO Secretary of Foreign Affairs Concurred in: (SGD) CESAR VIRATA Secretary of Finance Date: January 6, 1971" The Department Order was concurred in by the Secretary of Finance on January 6, 1971. All concerned are hereby enjoined to be guided accordingly. cdt MISAEL P. VERA Commissioner of Internal Revenue