Repeal of Section 4(a) of Revenue Regulations No. 13-78 as Amended by Revenue Regulations No. 6-79 or the Expanded Withholding Tax Regulations; and the Filing of Returns for Public Corporations

February 16, 1985 REVENUE MEMORANDUM CIRCULAR NO. 21-85 SUBJECT : Repeal of Section 4(a) of Revenue Regulations No. 13-78 as Amended by Revenue Regulations No. 6-79 or the Expanded Withholding Tax Regulations; and the Filing of Returns for Public Corporations TO : All Internal Revenue Officers and Others Concerned Section 4(a) of Revenue Regulations No. 13-78, as amended by Revenue Regulations No. 6-79, reads as follows: "Sec. 4. Exemption from withholding The withholding of tax herein prescribed shall not apply to income payments to the following: (a) National government and its instrumentalities, including provincial, city or municipal governments, as well as government-owned or controlled corporations casia xxx xxx xxx" Under P.D. No. 1931, the tax exemptions and/or preferential tax treatment in favor of government-owned or controlled corporations, including their subsidiaries, and all other units of government, are withdrawn. (Revenue Memorandum Circular No. 1-85) Such being the case, the above-quoted paragraph (a) is considered repealed. Hence, income payments to the national government and its instrumentalities, including provincial, city or municipal governments, as well as government-owned or controlled corporations are now subject to the withholding provisions of the Expanded Withholding Tax Regulations. Public corporations, i.e., the provinces, cities and municipalities are now subject to internal revenue taxes on income/transactions arising out of their proprietary activities or when they are engaged in economic activities or businesses. Consequently, their respective treasurers are held responsible for the filing of the returns and payment of the taxes due on said taxable activities. cd All concerned are hereby enjoined to give this Circular as wide a publicity as possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner