Publishing the Contents of Memorandum Circular No. 745 of the Office of the President

June 25, 1974 REVENUE MEMORANDUM CIRCULAR NO. 39-74 SUBJECT : Publishing the Contents of Memorandum Circular No. 745 of the Office of the President TO : All Internal Revenue Officers and others concerned For the information and guidance of all concerned, there is quoted hereunder the contents of Memorandum Circular No. 745 which quoted in toto the provisions of Revenue Regulations No. 4-74 implementing Presidential Decree No. 379 dated January 21, 1974, as amended by Presidential Decree No. 417, dated March 19, 1974: "MEMORANDUM CIRCULAR NO. 745 "REVENUE REGULATIONS No. 4-74, IMPLEMENTING PRESIDENTIAL DECREE No. 379, DATED JANUARY 21, 1974, AS AMENDED BY PRESIDENTIAL DECREE NO. 417, DATED MARCH 19, 1974 "Quoted hereunder for the information and guidance of all concerned are the contents of "Revenue Regulations No. 4-74," issued by the Honorable, the Secretary of Finance to all Internal Revenue Officers and others concerned, on May 15, 1974: 'Pursuant to Section 10 of Presidential Decree No. 379, as amended, the following regulations requiring the submission of statement of assets, liabilities and net worth are hereby promulgated for the guidance of all concerned and shall be known as Revenue Regulations No. 4-74. 'SECTION 1. Scope . These regulations shall govern the submission of the statement of assets, liabilities and net worth required under Presidential Decree No. 379 as amended by Presidential Decree No. 417. 'SEC. 2. Who must file . (a) All persons, whether natural or juridical, having gross assets of Fifty Thousand Pesos or more as of December 31, 1973, regardless of the net worth, shall file a statement of all assets, liabilities and net worth in the form prescribed. 'In the case of minors, insane and/or other incapacitated persons, the statement shall be filed by their guardians. 'In the case of juridical persons, the President, Manager or any other person in charge of the management or affairs of the business shall be the one to file the statement. '(b) Public officers in the government service as of December 31, 1973, regardless of the amount of their gross assets. '(c) Married individuals who are not legally separated should file only one statement, which should contain the consolidated assets, liabilities and net worth of the spouses. 'See. 3. When to file; copies to be filed . (a) The statement of assets, liabilities and net worth required in these regulations shall be filed on or before September 30, 1974. '(b) The statement shall be prepared in triplicate: the original and the duplicate copies shall be filed with the Bureau of Internal Revenue and the triplicate copy, duly stamped by the receiving officer shall be retained by the taxpayer as his/its file copy. 'Public officers shall, however, accomplish the statement in five copies and file two signed copies with the head of their office on or before September 30, 1974. Such copies of the statement shall serve as the statement of assets and liabilities required by Republic Act No. 3019 to be filed on or before January 31, 1974. In cases where husband and wife are both public officers but working in different offices they shall each furnish their respective department heads two signed copies of said statement. Subsequent statements to be filed pursuant to Republic Act No. 3019 shall be filed in the manner provided for in the aforesaid law. 'SEC. 4. Where to file . The statement of assets, liabilities and net worth required in these regulations shall be filed with the Commissioner of Internal Revenue, Revenue Director, Revenue District Officer or Collection Agent of the city or municipality or the City/Municipal Treasurer who has been designated as revenue collection officer of the municipality where the filer has his/its place of business or his/its legal residence. If there be no office or place of business in the Philippines or if there be no legal residence, the statement must be filed with the Commissioner of Internal Revenue in Manila. 'In the case of non-resident citizens, the statement must be filed with the Philippine Embassy or Consulate nearest their place of residence abroad or with the Commissioner of Internal Revenue in Manila. 'SEC. 5. Exemption from Filing . The following are not required to file statement of assets, liabilities and net worth: '(a) An individual, the total gross value of whose assets is less than Fifty Thousand Pesos, except public officers who are required to file the statement irrespective of the total value of their gross assets; '(b) Diplomatic or consular representatives and officers of foreign governments; '(c) Members of the Armed Forces of the US government in the active service who are stationed in the Philippines; and '(d) Officials and officers, who are not citizens of the Philippines, of multi-national corporations or of agencies of the United Nations or foreign or international regional organizations established in the Philippines. 'SEC. 6. Contents of statement . (a) The statement shall include all the assets and liabilities of the person filing, whether within or without the Philippines and whether or not the assets are covered by the different Presidential Decrees on tax amnesty. However, where such person filing is a non-resident alien or a foreign corporation, whether resident or non-resident, the statement shall include only those assets and liabilities within the Philippines. '(b) The assets shall include all properties, real or personal, tangible or intangible, and whether or not used in trade or business. '(c) The liabilities shall comprise all known debts and obligation which are legitimate and enforceable, whether secured or unsecured and whether or not incurred in trade or business. '(d) The statement shall likewise contain the Net Worth as hereinafter defined. "SEC. 7. Valuation . (a) Assets '(1) Real properties . In the case of real properties, the cost of acquisition and improvement shall be considered for the purpose of computing the gross assets and net worth. However, depreciable real properties used in business shall be valued at acquisition or construction cost less accumulated depreciation. The statement shall also include the value of such assets contained in the declaration filed under Presidential Decree No. 76. '(2) Personal properties . In the case of personal properties, the amount to be declared shall be the cost of acquisition. However, if the property is used in trade or business, it shall be valued at acquisition cost less accumulated depreciation. '(3) Properties acquired by gratuitous title . In the case of property, whether real or personal, acquired by gratuitous title, the cost shall be the value on which the transfer taxes due on the transmission of such property were finally determined by the Bureau of Internal Revenue; however, if no such determination was made, the fair market value of the property at the time of its acquisition shall be deemed to be the cost thereof. '(b) Liabilities . Only legitimate and enforceable obligations reducible in sums of money shall be included in the statement. 'SEC. 8. Treatment of statement . The statement required under these regulations shall be confidential in nature. No information in the statement shall be published except in the form of tabulations and summaries having no reference to the person filing. 'SEC. 9. Definitions . As herein used, the following terms are defined as follows: '(a) Person " means an individual, trust, estate, corporation or a duly registered general partnership, more specifically detailed as follows: '(1) Citizens of the Philippines whether residing here or abroad; '(2) Resident aliens; '(3) Non-resident aliens, whether or not engaged in trade or business in the Philippines, with respect to properties of whatever kind and nature situated in the Philippines; '(4) Domestic corporations no matter how created or organized and for whatever purposes, as defined in Section 84 of the Tax Code, and include unregistered partnerships, joint stock companies, joint accounts (cuentas en participacion), associations or insurance companies; '(5) Resident foreign corporations; '(6) Non-resident foreign corporations engaged in trade or business in the Philippines or non-resident foreign corporations having properties of whatever kind or nature situated in the Philippines; '(7) General professional partnerships and duly registered general co-partnerships; and '(8) Estates and trusts. '(b) "Public Officers" include all elective and appointive officials and employees of the government or any of its agencies and instrumentalities, including government-owned or controlled corporations, irrespective of the nature of their position, whether permanent or temporary, classified or unclassified, or exempt service. '(c) "Gross assets" shall comprise all properties, real or personal, tangible or intangible, and whether used in business or not. '(d) "Fair market value" means the price at which property will change hands between a seller who is willing to sell and a buyer who is willing to buy both under no obligation to sell or to buy. '(e) "Liabilities comprise all known debts and obligations which are legitimate and enforceable, whether secured or unsecured, and whether incurred or not in trade or business. '(f) "Net Worth" is the difference between total assets and total liabilities. 'SEC. 10. Penal Provisions . (a) Any officer or employee of the Bureau of Internal Revenue or any government entity having knowledge of the declaration of assets, liabilities and net worth required in these regulations who shall disclose the same to any unauthorized person shall be subject to a fine in the amount of not less than Five Thousand Pesos or imprisonment for not less than two years, or both, and shall be summarily dismissed from the service for cause. '(b) Any person required to file the statement under this decree who knowingly makes a false declaration or who deliberately fails to comply with any of the provisions hereof, shall upon conviction, pay a fine of not less than Five Thousand Pesos and imprisonment of not less than two years. 'If the offense is committed by a juridical person, the manager or person in charge of the management of the business or affairs thereof shall be responsible therefor and, upon conviction, shall pay a fine of not less than Five Thousand Pesos and imprisonment of not less than two years. 'SEC. 11. Effectivity . These regulations shall take effect immediately. "All concerned are enjoined to be guided accordingly." "By authority of the President: ALEJANDRO MELCHOR Executive Secretary" "Manila, June 15, 1974" In compliance with the provisions of said circular all employees of the Bureau of Internal Revenue must file the Statement of Assets, Liabilities and Net Worth, irrespective of the amount of their assets, in accordance with the following procedure: 1. Get from the nearest BIR office blank forms of the Statement of Assets, Liabilities and Net Worth (BIR Form 184 is the prescribed form for use by individuals). 2. Five copies should be secured described as follows: a. Original (White) BIR copy b. Duplicate (Green) BIR copy c. Triplicate (Pink) Filer's copy d. Quadruplicate & Quintuplicate (Yellow) Copies to be filed for purposes of the Anti-Graft and Corrupt Practices Act 3. The yellow copies are distinguished from the regular form not only in color but by the notation on the upper right hand corner of the words "Public Officer's Copy (RA 3019). 4. Forms should be filled up in accordance with the instructions. 5. The original and duplicate copies should be filed with the Collection Agent, Revenue District Officer or Regional Director, as the case may be and in the case of employees in the National Office, they should be filed with the Tax Amnesty Implementation Officer. The pink copy should be fully stamped by the receiving office and kept by the filer as his copy. 6. The yellow copies, which are the copies to be filed for purposes of the Anti-Graft and Corrupt Practices Act, should be filed separately and with the head of unit responsible for the receipt of statements under the Anti-Graft and Corrupt Practices Act. 7. If husband and wife are employees of the government and they are working in different units, the spouse or the employee employed in Offices other than the Bureau of Internal Revenue shall also file two yellow copies of his/her statement with the head of his/her unit for purposes of complying with the requirements of RA 3019. All concerned are hereby enjoined to comply with the provisions of this memorandum circular. MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5