Publishing R. A. No. 5431, Amending Sections 24, 26, 29, 32, 49, 53, 54 and 84 (b) of the National Internal Revenue Code, As Amended (Re: Rates of Tax on Corporations)

November 15, 1968 REVENUE MEMORANDUM CIRCULAR NO. 41-68 SUBJECT : Publishing R. A. No. 5431, Amending Sections 24, 26, 29, 32, 49, 53, 54 and 84 (b) of the National Internal Revenue Code, As Amended (Re: Rates of Tax on Corporations) TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published below R. A. No. 5431 viz.: "REPUBLIC ACT NO. 5431 AN ACT AMENDING SECTIONS 24, 26, 29, 32, 49, 53, 54 AND 84(b) OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED (re: rates of tax on corporations). Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled : SECTION 1. Section 24 of Commonwealth Act 466, as amended, otherwise known as the National Internal Revenue Code, is further amended to read as follows: 'SEC. 24. Rates of tax on corporations . (a) Tax on domestic corporations . A tax is hereby imposed upon the taxable net income received during each taxable year from all sources by every corporation organized in, or existing under the laws of the Philippines, no matter how created or organized, but not including duly registered general co-partnership (compaias colectivas) general professional partnerships, private educational institutions, and building and loan associations, in accordance with the following: LLjur 'Twenty-five per cent upon the amount by which the taxable net income does not exceed one hundred thousand pesos; and 'Thirty-five per cent upon the amount by which the taxable net income exceeds one hundred thousand pesos. 'Private educational institutions other than those exempt under Section 27(c) of this Code shall pay a tax of ten per cent of their taxable net income. 'Building and loan associations operating in accordance with the General Banking Act shall pay a tax of twelve per cent of their taxable net income. '(b) Tax on foreign corporations . (1) Non-resident corporations . A foreign corporation not engaged in trade or business in the Philippines including a foreign life insurance company not engaged in the life insurance business in the Philippines shall pay a tax equal to 35 per cent of the gross income received during each taxable year from all sources within the Philippines, as interests, dividends, rents, royalties, salaries, wages, premiums, annuities, compensations, remunerations for technical service or otherwise, emoluments or other fixed or determinable annual, periodical or casual gains, profits, and income, and capital gains: Provided , however ,That premiums shall not include reinsurance premiums. '(2) Resident corporations . A foreign corporation engaged in trade or business within the Philippines shall be taxable as provided in subsection (a) of this section. '(c) Rates of Tax on life insurance companies . Life insurance companies shall be taxable as provided in this subsection or under subsections (a) or (b),as the case may be, whichever will result in a higher tax. '(1) Domestic life insurance companies . A tax is hereby imposed upon the net investment income received during each taxable year from all sources, whether from within or outside the Philippines, by every life insurance company organized in, or existing under the laws of, the Philippines, but not including a purely cooperative company or association as defined in this Code, at the rate of eight and three-fourths per cent upon that income. A domestic life insurance company shall be exempt from income tax for a period of three years from the date of issuance of its certificate of authority. LLphil 'For purposes of this paragraph, the 'net investment income of a domestic life insurance company is its gross investment income derived from sources within and outside the Philippines, less its investments expenses. '(2) Foreign life insurance companies . A foreign life insurance company engaged in the life insurance business in the Philippines shall pay the rate of tax provided in paragraph (1) of this subsection upon the net investment income received during each taxable year from all sources within the Philippines. 'For purposes of this paragraph, the "net investment income from all sources within the Philippines" of a foreign life insurance company engaged in the life insurance business in the Philippines is that portion of its gross world investment income which bears the same ratio to that income as their total Philippine reserve bears to their total world reserve, less that portion of their total world investment expenses which bears the same ration to those expenses as their total Philippine investment income bears to their total world investment income. 'For purposes of paragraphs (1) and (2) of this subsection, "gross investment income" means income received during the taxable years from rents, dividends, interests and income from any other business than the life insurance business conducted by the company, including net capital gains as defined in Section 34 of this Code;" investment expenses" means real estate expenses, depreciation (except to the extent that property is used in or connected with its underwriting business),interest paid or accrued within the taxable year on indebtedness (except on indebtedness incurred to purchase or carry obligations the interest upon which is wholly exempt from taxation under existing laws),and such investment expenses paid or accrued during the taxable year as are ordinary and necessary in the conduct of its investment or in the conduct of its business other than the life insurance business. '(d) The provisions of existing special or general laws to the contrary notwithstanding, all corporate taxpayers not specifically exempt under Sections 24(c) (1) and 27 of this Code shall pay the rates provided in this section. All corporations, agencies, or instrumentalities owned or controlled by the Government, including the Government Service Insurance System and the Social Security System but excluding educational institutions, shall pay such rate of tax upon their taxable net income as are imposed by this section upon associations or corporations engaged in a similar business or industry.' SEC. 2. Section 26 of the same Act is hereby further amended to read as follows: 'SEC. 26. Tax liability of members of duly registered general co-partnerships or of general professional partnerships . Persons carrying on business in general co-partnership (compaia colectiva) duly registered in the mercantile registry, or those exercising a common profession in general partnership, shall be liable for income tax only in their individual capacity, and the share in the profits of the registered general co-partnership (compaia colectiva) or in the general professional partnership to which any taxable partner would be entitled, whether distributed or otherwise, shall be returned for taxation and the tax paid in accordance with the provisions of this Title.' SEC. 3. Section 29 of the same Act is hereby amended by adding a new subsection to read as follows: 'SEC. 29. Gross Income . ... '(a) General definition . ... '(b) Exclusions from gross income . ... '(c) Dividends received from domestic corporation . In the case of dividends received by a domestic or resident foreign corporation from a domestic corporation both liable to the tax rates provided in the second and third paragraphs of Sections 24(a),only twenty-five per cent of such dividends shall be returnable for purposes of the tax in the same paragraphs.' SEC. 4. Section 31 of the same Act is hereby amended to read as follows: "SEC. 32. Special provisions regarding income and deductions of insurance companies, whether domestic or foreign . (a) Special deductions allowed to insurance companies . In the case of insurance companies, whether domestic or foreign, doing business in the Philippines, the net additions, if any, required by law to be made within the year to reserve funds and the sums other than dividends paid within the year on policy and annuity contracts may be deducted from their gross income: Provided , however ,That the released reserve be treated as income for the year of release: Provided, further ,That domestic life insurance companies and resident foreign life insurance companies shall pay the tax imposed under Section 24 (a) to be entitled to the special deductions allowed under this paragraph. '(b) Mutual insurance companies . ... '(c) Mutual marine insurance companies . Mutual marine insurance companies shall include in their return of gross income gross premiums collected and received by them less amount paid for reinsurance, but shall be entitled to include in deductions from gross income amounts repaid to policy holders on account of premiums previously paid by them, and interest paid upon those amounts between the ascertainment and payment thereof. '(d) Assessment insurance companies . Assessment insurance companies, whether domestic or foreign may deduct from their gross income the actual deposit of sums with the officers of the Government of the Philippines pursuant to law, as additions to guarantee or reserve funds. SEC. 5. Section 49 of the same Act is hereby amended to read as follows: 'SEC. 49. Returns of duly registered general co-partnerships or general professional partnerships . Every duly registered general co-partnership (compaia colectiva) or general professional partnership shall file, in duplicate, a return of its income, except income exempt under Section 29(b) of this Title, setting forth the items of the gross income and the deductions allowed by this Title, and the names and addresses and shares of the partners.' cdll SEC. 6. Section 53 of the same Act is hereby amended to read as follows: 'SEC. 53. Withholding of tax at source . (a) Tax-free covenant bonds . (1) Requirement of withholding . In any case where bonds, mortgages, deeds of trust, or other similar obligations of domestic or resident foreign corporations, contain a contract or provision by which the obligor agrees to pay any portion of the tax imposed in this Title upon the obligee or to reimburse the obligee for any portion of the tax or to pay the interest without deduction for any tax which the obligor may be required or permitted to pay thereon or to retain therefrom under any law of the Philippines, or of any state or country, the obligor shall deduct and withhold a tax equal to 25 per cent of the interest or other payments upon those bonds, mortgages, deeds of trust, or other obligations, whether the interest or other payments are payable annually or at shorter or longer periods, and whether the bonds, securities or obligations had been or will be issued or marketed, and the interest or other payments thereon paid within or outside the Philippines, if the interest or other payment is payable to a nonresident alien or to a citizen or resident of the Philippines. '(2) Benefit of exemptions against net income . The deduction and withholding required in subsection (a) (1) of this section shall not be required in the case of a citizen, resident alien, or nonresident alien engaged in trade or business in the Philippines, entitled to received the interest or other payment, if that individual shall file with the withholding agent, on or before February first, a signed notice in writing claiming the benefit of the exemption provided in Section 23 of this Title. '(b) Nonresident aliens and foreign corporations . (1) Nonresident aliens . Every individual, corporation, partnership, or association, in whatever capacity acting, including a lessee or mortgagor of real or personal property, trustee acting in any trust capacity, executor, administrator, receiver, conservator, fiduciary, employer, and every officer or employee of the Government of the Republic of the Philippines having the control, receipt, custody, disposal, or payment of interest, dividends, rents, royalties, salaries, wages, premiums, annuities, compensation, remunerations, emoluments, or other fixed or determinable annual, periodical, or casual gains, profits, and income, and capital gains, of any nonresident alien not engaged in trade or business within the Philippines, shall (except in the cases provided in sub-section (a) (1) of this section) deduct and withhold from the annual, periodical, or casual gains, profits, and income, and capital gains, a tax equal to 25 per cent thereof. This deduction and withholding shall not be required in the case of dividends paid by a foreign corporation unless (1) the corporation is engaged in trade of business within the Philippines, and (2) more than 85 per cent of the gross income of the corporation for the three-year period ending with the close of its taxable year preceding the declaration of the dividends (or for such part of the period as the corporation has been in existence) was derived from sources within the Philippines as determined under the provisions of Section 37. The Commissioner of Internal Revenue may authorize the tax to be deducted and withheld from the interest or other income upon any security or obligation the owners of which are not known to the withholding agent. '(2) Nonresident foreign corporations . In the case of foreign corporations subject to tax under this title not engaged in trade or business within the Philippines, there shall be deducted and withheld at the source in the same manner and upon the same items as is provided in sub-section (b) (1) of this section, as well as on remunerations for technical services or otherwise, a tax equal to 35 per cent thereof. This tax shall be returned and paid in the same manner and subject to the same conditions as provided in Section 54. This deduction and withholding shall not be required in the case of reinsurance premiums ceded to foreign insurance corporations not engaged in trade or business in the Philippines.' SEC. 7. Section 54 of the same Act is hereby amended to read as follows: 'SEC. 54. Returns and payment of taxes withheld at source . (a) Quarterly return and payment of taxes withheld . Taxes deducted and withheld under Section 53 shall be covered by a return and paid to the Commissioner of internal Revenue or to his collection agent in the province, city, or municipality where the withholding agent has his legal residence or principal place of business, or where the withholding agent is a corporation, where the principal office is located. The taxes deducted and withheld by the withholding agent shall be held as a special fund in trust for the Government until paid to the collecting officers. The Commissioner of Internal Revenue may, with the approval of the Secretary of Finance, require these withholding agent to pay or deposit the taxes deducted and withheld at more frequent intervals when necessary to protect the interest of the Government. The return shall be filed and the payment made within 25 days from the close of each calendar quarter. LibLex '(b) Annual statements of income payments made and taxes withheld . Every withholding agent required to deduct and withhold taxes under Section 53 shall furnish each income recipient, in respect to his receipts during the calendar year, on or before January 31, of the succeeding year, a written statement showing the income payments made by the withholding agent during the calendar year, and the amount of the tax deducted and withheld therefrom. '(c) Annual returns . Every withholding agent required to deduct and withhold taxes under Section 53 shall submit to the Commissioner of Internal Revenue a statement of the total amount withheld during the year, with copies of the statement referred to in subsection (b) of this section, on or before January 31 of the succeeding year. This return, if made and filed in accordance with regulations approved by the Secretary of Finance, shall be sufficient compliance with the requirements of Section 77 of this Title in respect to the income payments. 'The Commissioner of Internal Revenue may, by regulations, grant to any withholding agent a reasonable extension of time to furnish and submit the return required in this subsection. '(d) Verification of returns . The Commissioner of Internal Revenue may, by regulations, require that any return, statement, or other document required to be filed under this section, or under regulations approved by the Secretary of Finance, shall contain, or be verified by, a written declaration that it is made under the penalties of perjury, and this declaration shall be in lieu of any oath otherwise required. '(e) Income of recipient . Income upon which any tax is required to be withheld at the source under Section 53 shall be included in the return of its recipient but any amount of tax so withheld shall be credited against the amount of income tax as computed in his return. If the income tax collected at source exceeds the tax due on his return, the excess shall be refunded to him subject to the provisions of Section 309; if the income tax collected at source is less than the tax due on his return, the difference shall be paid in accordance with the provisions of Section 51. '(f) Tax paid by recipient . If a tax required under section 53 to be deducted and withheld is paid by the recipient of the income, it shall not be recollected from the withholding agent; nor in cases in which the tax is so paid shall any penalty be imposed upon or collected from the recipient of the income or the withholding agent for failure to return or pay the tax; unless the failure was fraudulent and for the purpose of evading payment.' SEC. 8. Subsection (b) of Section 84 of the same Act is hereby amended to read as follows: 'SEC. 84. Definitions . when used in this Title . ... '(b) The term "corporation" includes partnerships, no matter how created or organized, joint stock companies, joint accounts (cuentas en participacion) associations or insurance companies, but does not include duly registered general co-partnerships (compaias colectivas) or general professional partnerships. General professional partnerships are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business.' SEC. 9. All special laws, acts and parts thereof, which are inconsistent with the provisions of this Act are hereby amended or repealed. SEC. 10. The provisions of this Act shall apply to income for taxable years beginning after June 30, 1968. Approved, June 27, 1968" Features of the Amendment 1. Section 24 . Rates of Tax on corporations (a) Rates of Tax on domestic corporations . Domestic life insurance companies and foreign life insurance companies doing business in the Philippines were removed from the exclusion provision of the first paragraph of this subsection. The reason for the exclusion is to secure conformity with the amendment subjecting such life, insurance companies to tax as ordinary corporations or on the basis of investment income whichever will result in a higher tax. The amendment at the same time included within the exclusion provision of this paragraph of this subsection general professional partnerships, private educational institutions and building and loan associations, the reason being that, in the case of private educational institutions and building and loan associations, the rates of tax to which they are subject are lower whereas, in the case of general professional partnerships, such partnerships like general partnerships are not subject to the corporate income tax. LexLib The provision in this subsection concerning the taxability of foreign corporations engaged in trade or business in the Philippines was deleted, the reason for the deletion being that the taxation of resident foreign corporations are already provided for by Paragraph 2 of subsection (b) of this section. Another apparent reason is to separate totally the treatment of domestic and foreign corporations. The provision in this subsection regarding the taxability of dividends received from domestic corporations was deleted and transferred to Section 29 as new subsection (c) thereof. Finally, the normal rates of tax prescribed in this subsection on domestic corporations were increased from 22% and 30% to 25% and 35%,respectively. (b) Tax on foreign corporations . (1) Non-resident corporations . This paragraph of this subsection was amended by expressly including within the purview thereof foreign life insurance companies not engaged in the life insurance business in the Philippines. This paragraph was also amended to include within the enumeration of fixed and determinable income, royalties. The amendment also qualified the term "remunerations" by the addition of the phrase after it reading "for technical services or otherwise".This qualification is significant. Previously, remittances abroad or remunerations to the foreign corporations for technical services have not been subjected to tax. The rate of tax prescribed in this paragraph of this subsection is also increased from 30% to 35% to conform with the increased rate of corporate income tax. (2) Resident corporations . This paragraph of this subsection prescribing the tax on foreign corporations engaged in trade, or business in the Philippines was amended by deleting therefrom the clause "except foreign life insurance companies",the reason being that foreign life insurance companies engaged in trade or business in the Philippines can now be subjected to tax as ordinary corporations under the amendment to subsection (c) of this Section. This paragraph (2) of subsection (b) of Section 24 provides that foreign corporations engaged in trade or business in the Philippines shall be taxable as provided in subsection (a) of Section 24. As it now stands amended by R. A. 5431, however, subsection (a) of Section 24 now provides only for the taxation of domestic corporations, the provision therein regarding the taxation of resident foreign corporations having been deleted by the amendatory Act. The deleted provision provided that resident foreign corporations shall pay the same tax as domestic corporations but only on income from sources within the Philippines. It would seem therefore, that resident foreign corporations would be subject to tax on income derived by them from all sources within or without the Philippines, the tax prescribed in subsection (a) on domestic corporations being on income derived from all sources. Such is not the case, however, considering that the deletion of resident corporations from the purview of subsection (a) had the sole purpose of segregating them from domestic corporations. Resident foreign corporations shall remain subject to tax only on income derived from sources within the Philippines. (c) Rates of tax on life insurance companies . The amendment to this subsection subjects life insurance companies, domestic or foreign, doing business in the Philippines to tax as ordinary corporations or on the basis of investment income whichever will result in a higher tax. The amendment also re-structured this subsection separating domestic life insurance companies from foreign life insurance companies without, however, changing the treatment of their taxation on the basis of investment income the amendment also increased the rate of tax from 6 to 8-3/4%. The amendment also expanded the purview of the investment income of life insurance companies under this paragraph. Before the amendment, the investment income of life insurance companies includes only rents, dividends, and interest. As amended, the investment income of life insurance companies now includes income from any other business than the life insurance business conducted by them and capital gains. The amendment also excluded from investment expenses depreciation on property used in or connected with the underwriting business of life insurance companies. In view of the expansion of the purview of the investment income of life insurance companies which includes income from business other than life insurance business conducted by them, the amendment also provides for deduction allowance for expenses incurred in the conduct of such businesses. Finally, the amendment to this subsection exempts domestic life insurance companies from income tax for a period of 3 years from the date of issuance of their certificates of authority. cdta (d) This is a new subsection added to Section 24. This subsection subjects corporate taxpayers other than those exempted under subsection (c) (1) of Section 24 and Section 27 to the corporate income tax regardless of the provision of existing special or general laws to the contrary. By virtue of this new provisions, all corporations which under special laws are exempt from income tax are now subject to tax. It is to be noted that the amendment speaks of existing special and general laws without qualification. Such being the case, the amendment can encompass existing franchises, franchises being also special law. Therefore, all corporations enjoying exemption from income tax by virtue of their franchises are now subject to income tax. This new subsection also subjects to the corporate income tax, government corporations, agencies, or instrumentalities, including the Government Service Insurance System and the Social Security System. Such government corporations, agencies, or instrumentalities shall pay the same rates of income tax as are imposed upon other corporations or associations engaged in similar business or industry. Government educational institutions, however, are excluded from the purview of this new subsection and, therefore, remain exempt from income tax. II. Section 26 . Tax liability of members of duly registered general co-partnerships or of general professional partnerships . The amendment to this Section consists purely of the inclusion from the provision thereof, general professional partnerships. This amendment is made in conformity to the amendment to subsection (a) of Section 24 which included from the exclusion provision of the subsection general professional partnerships. III. Section 29 . Gross Income . The amendment to Section 29 consists of the addition of a new subsection therein denominated as subsection (c).This new subsection is a transposition of the proviso in Section 24 (a) regarding the taxability of dividends received from domestic corporations without change in substance. IV. Section 32 . Special provisions regarding income and deductions of insurance companies whether domestic or foreign . (a) Special deductions allowed to insurance companies . The amendment to this subsection of Section 32 consists of the deletion of the provision excluding life insurance companies from the purview thereof consisting of the phrase "except domestic life insurance companies doing business in the Philippines".This exclusion jibes with the amendments of Section 24(a) and Section 24(c) subjecting life insurance companies to tax under either subsection whichever will result in a higher tax. However, this subsection of Section 32 was also amended by the addition of a new proviso allowing life insurance companies the special deduction for net addition to reserved funds and the sums other than dividends paid within the year on policy and annuity contracts if they are to be taxed under Section 24(a) as ordinary corporations. (b) Mutual insurance companies . There is no amendment to this subsection. (c) Mutual marine insurance companies . The amendment to this subsection of Section 32 is not substantial. The amendment is purely grammatical. (d) Assessment insurance companies . There is also no amendment in substance to this subsection of Section 32. The provisions of this subsection were only rephrased. V. Section 49 . Returns of duly registered general co-partnerships or general professional partnerships . The amendment to this Section consists only of the inclusion within the purview thereof general professional partnerships. This amendment jibes with the amendments to Section 24(a) and (c) and Section 26. The amendment also rephrased the provisions of this section. VI. Section 53 . Withholding of tax at source . (a) Tax-free covenant bonds . (1) Requirement of withholding . The amendment to this paragraph of this subsection of Section 53 increased the rate of tax from 20% to 25%. The amendment also inserted the words "or other payments" as within the coverage of the withholding in addition to interest which was the sole coverage before the amendment. (2) Benefit of exemption against net income . The amendment of this paragraph of subsection (a) of Section 53 extends the benefit of exemption from withholding to non-resident aliens engaged in trade or business in the Philippines which heretofore had been extended only to a citizen of the Philippines or resident alien. This amendment is complementary to the provisions of paragraph (1) of this subsection which also subjects to withholding, payments to non-resident aliens. llcd Besides non-resident aliens engaged in trade or business in the Philippines are subject to tax on income derived from all sources in the Philippines on the same basis as citizens or residents and are also entitled to personal exemption in accordance with Section 23 of the Tax Code on the basis or reciprocity. There is, therefore, no reason why the benefits of exemption from withholding should not be extended to them. (b) Non-resident aliens and foreign corporations . (1) Non-resident aliens . In line with the increased rates of tax, the rate of withholding in this paragraph of this subsection was also increased from 20% to 25%. The amendment also included in the enumeration of fixed and determinable incomes royalties, casual gains, and capital gains. The amendment furthermore deleted from the qualifying status of non-resident aliens not engaged in trade or business within the Philippines, the phrase "and not having an office or place of business therein". Finally, the proviso in this paragraph was converted into a sentence and "other income" other than interest was added to the coverage of the withholding and the subjects of such payments were expanded to include "obligations" other than securities as previously obtaining. (2) Non-resident foreign corporations . This is a new paragraph which is a transposition of the former provisions of Section 54 which on the other hand were substituted by provisions relating to the return and payment of taxes withheld. In line further with the increase in rates of tax, the rate of withholding tax on incomes of non-resident foreign corporations was also increased from 30% to 35%. VII. Section 54 . Returns and payment of taxes withheld at source . The provisions of this Section are entirely new, its former provisions having been transposed to Section 53 and now constituting the second paragraph of subsection (b) thereof. (a) Quarterly return and payment of taxes withheld . This subsection is a transposition of the former provisions of subsection (c) of Section 53 with amendments. The amendment expressly provides that the return shall be made and the tax paid to the Commissioner or to the collection agents in the localities where the withholding agent has a legal residence or principal place of business or, where the withholding agent is a corporation, where the principal office is located. Before the amendment, returns are filed and the tax paid on or before April 15 of each year. Under the amendment, the filing of the return and the payment of tax are now made within 25 days from the close of each calendar quarter. The amendment also authorized the Commissioner of Internal Revenue, with the approval of the Secretary of Finance, to require the withholding agents to pay or deposit the taxes deducted and withheld at source at more frequent intervals when necessary to protect the interest of the government. (b) Annual statements of income payments made and taxes withheld . This is a new provision. It requires withholding agents to furnish each income recipient on before January 31 of the succeeding year, a statement of the income payments received by him and the amount of tax deducted and withheld. (c) Annual returns . This is also a new provision. This new provision requires the withholding agent to submit to the Commissioner of Internal Revenue a statement indicating the total amount withheld during the year on or before January 31 of the succeeding year submitting therewith copies of the statements furnished each individual income recipient during the year as provided for in paragraph (b) of this section. The statement required in this new provision, however, shall be considered as sufficient compliance with the requirements of Section 77 regarding information at source as to payments of P1,800.00 or more. With the submission, therefore, of the statement required in this paragraph, the withholding agent need no longer submit the statement required by Section 77 insofar as payments to the income recipient covered by the statement are concerned. cdll Finally, the amendment authorized the Commissioner of Internal Revenue to grant any withholding agent a reasonable extension of time to furnish and submit the return required in this sub-section. (d) Verification of returns . This is again a new provision. Under this provision, the Commissioner of Internal Revenue may require the verification of the returns required to be filed under this Section under regulations approved by the Secretary of Finance consisting of a written declaration that the returns are made under the penalties of perjury which shall be in lieu of any oath otherwise required. (e) Income of recipient . This sub-section is a transposition of the former provision of sub-section (d) of Section 53 with an amendment to the effect that if the tax collected at source is less than the tax due on the return, the difference shall be paid in accordance with the provisions of Section 51. (f) Tax paid by recipient .This sub-section is a transposition of the former provisions of sub-section (e) of Section 53 which was deleted therefrom without amendment. However, the paragraphs was rephrased. VIII. Section 84 . Definitions . Sub-section (b) of this Section was amended by excluding from the definition of the term "corporations" general professional partnerships and providing a definition for the latter. This amendment jibes with the other amendments involving general professional partnerships. Effectivity Section 10 of Republic No. 5431 provides that its provisions shall apply to income from taxable years beginning after June 30, 1968. Enforcement All internal revenue officers and others concerned are enjoined to be guided accordingly and to give the provisions of this circular as wide a publicity as possible. prcd (SGD.) MISAEL P. VERA Commissioner of Internal Revenue APPROVED: (SGD.) EDUARDO Z. ROMUALDEZ Secretary of Finance