Clarifying Certain Compliance Requirements Under Presidential Decree No. 1959, Executive Order No. 990 and Revenue Regulations No. 19-84 and 20-84

November 9, 1984 REVENUE MEMORANDUM CIRCULAR NO. 35-84 SUBJECT : Clarifying Certain Compliance Requirements Under Presidential Decree No. 1959, Executive Order No. 990 and Revenue Regulations No. 19-84 and 20-84 TO : All Internal Revenue Officers and Others Concerned 1. Applicability of the new percentage, amusement and withholding tax rates, which took effect on October 15, 1984 . The following taxpayers shall, in the fiscal or calendar quarterly return which includes the month of October, 1984, segregate the gross receipts or gross income payments received or paid on or before October 14, 1984 and those received or paid on or after October 15, 1984. The segregation shall be made in an "Auxiliary Statement" to be attached to the return: a) millers, contractors, operators or proprietors of hotels, motels, etc., caterers, common carriers, workers, cinematographic film owners, lessors and distributors, dealers in securities and lending investors; b) persons doing insurance business in the Philippines; c) proprietors, lessees or operators of cockpits, cabarets, night or day clubs, boxing exhibitions, professional games, Jai-Alai, race tracks and bowling alleys; and d) banks, or non-bank financial intermediaries or commercial industrial, finance companies and other non-financial companies authorized by the Securities and Exchange Commission to issue deposit substitutes. Auxiliary Statement Example Tax Due Kind Period Amount Rate Tax Withheld Contractor's Gross Receipts Oct. 1-14 P1,000 3% P30.00 " " Oct. 15 & P1,000 4% P40.00 after Interest Payments on Time Deposits Oct. 1-14 P1,000 20% P200.00 " " Oct. 15 & after P1,000 15% P150.00 2. Filing of the old final annual cumulative percentage tax return and the non-cumulative quarterly return . (a) Calendar Year Basic Taxpayers The final annual percentage tax return for taxable year 1984, shall be filed on cumulative basis not later than the 20th day of February, 1985 in accordance with Revenue Regulations No. 6-81. For the 1st quarter of 1985, the non-cumulative final quarterly percentage tax return shall be filed not later than the 20th day of April, 1985, and thereafter, every 20th day after the close of each quarter. b) Fiscal Year Basis Taxpayers Taxpayers whose fiscal years end before December 31, 1984, shall file the old final annual cumulative percentage tax return not later than the 20th day of the 2nd month after the close of the final quarter in accordance with the above-quoted Revenue Regulations No. 6-81. FY Ending Filing Date Sept. 30, 1984 Nov. 20, 1984 Oct. 31, 1984 Dec. 20, 1984 Nov. 30, 1984 Jan. 20, 1985 Taxpayers whose fiscal quarters commence before December 31, 1984, and extend to 1985, shall continue to file the cumulative quarterly returns in accordance with Revenue Regulations No. 6-81. Final Quarter Filing Date Oct. 1, Nov. & Dec. 31, 1984 Jan. 20, 1985 Nov. & Dec. 1984 & Jan. 31, 1985 Feb. 20, 1985 Dec. 1, 1984, Jan. & Feb. 28, 1985 March 20, 1985 except where the taxpayer's fiscal year ends Jan. 31 or Feb. 28, 1985, in which case, the last filing date of the return in March 20 or April 20, 1985, respectively . cdt The non-cumulative quarterly return shall be filed for the fiscal quarters commencing after December 31, 1984, not later than the 20th day after the close of each quarter. Fiscal Quarter Filing Date Jan. 1, Feb. & March 31 April 20, 1985 Feb. 1 April 30 May 20, 1985 March 1 May 31 June 20, 1985 3. Accounting for unused/accumulated tax credits . Irrespective of the taxpayer's taxable year, the total amount of accumulated or unused tax credit accruing on inventories of raw materials, work-in-process and finished goods as of Jan. 1, Feb. 1, or March 1, 1985, as the case may be, shall be debited to the "Deferred Sales Tax Credit - Beginning" account or equivalent account, which shall be applied in four (4) equal installments against the quarterly sales tax for the four (4) quarters immediately following December 31, 1984, pursuant to Section 7 of Revenue Regulations No. 19-84. In the transition period covering the first calendar or fiscal quarter after December 31, 1984, if it is not practicable for the manufacturer to take actual physical inventory of the raw materials, work-in-process and finished goods and the corresponding sales and specific tax credits accruing thereon, including excess credits on unused raw materials, a sworn inventory of such raw materials and credits may be submitted not later than 30 days from the end of the previous quarter. The sworn list showing the quantity, description, value and the corresponding sales and specific tax credits, shall be filed with the Revenue District Office having jurisdiction of the city or municipality in which its principal place of business is located. In the said list, the amount of excess tax credits the claim for refund or credit for which have been filed with the Bureau may be indicated for information purposes only. This amount shall not be available for credits against sales taxes due per return. With respect to those whose fiscal years ended before December 31, 1984, the ending inventories shall be submitted in accordance with existing regulations. The supplier-dealer of raw materials for resale to manufacturers shall file a separate inventory of goods or articles showing the items of information as above stated, simultaneously with his application for accreditation. All internal revenue officers and others concerned are hereby enjoined to give this Revenue Memorandum Circular the widest publicity possible. (SGD.) RUBEN B. ANCHETA Acting Commissioner