Procedures Relative to the Imposition of One Percent (1%) Tax on Foreign Exchange Transactions

July 19, 1985 REVENUE MEMORANDUM ORDER NO. 19-85 SUBJECT : Procedures Relative to the Imposition of One Percent (1%) Tax on Foreign Exchange Transactions TO : All Internal Revenue Officers and Others Concerned Objective: This Order is issued to systematize the procedures in the receipt, transmittal and processing of Foreign Exchange Transaction Tax Returns, BIR Form No. 33-02, as revised, required under Revenue Regulation No. 16-84 dated October 12, 1984 and RMC No. 30-84 dated October 19, 1984. cdt Background: Foreign Exchange Transaction Tax Return, BIR Form No. 33.02, as revised, shall be filed in duplicate by every bank, non-bank financial intermediary and other authorized foreign exchange dealers/agents required to pay the tax on foreign exchange transactions. This return shall be filed on the first banking day of the succeeding week, covering foreign exchange transactions of the preceding transaction week (Thursday to Wednesday), with the Revenue District Officer or the Collection Agent of the city or with the Treasurer of the municipality where the taxpayer's principal office is located and where the books of accounts are kept. Procedures: The following procedures shall govern the processing of Foreign Exchange Transaction Tax Returns: A. Collection Agent shall - 1. Receive from banks, non-bank financial intermediaries and other authorized foreign exchange dealers or agents, BIR Form No. 33.02, as revised, stamp date of receipt on the proper space on all copies of the return; 2. Issue Payment Order (PO), for the total amount due as indicated on the return (use Tax Numeric Code No. 7260-0002); address the payment order to the bank, if the same is accredited with the BIR; 3. Retain original and duplicate copies of the return (triplicate to the filer); 4. Forward both copies of the return to the Assessment Branch weekly with a copy of the transmittal letter, Annex A, furnished the Revenue District Officer. B. Revenue District Officer shall - 1. See to it that all Collection Agents under his jurisdiction comply with the instructions on the transmittal of the returns. C. Assessment Branch shall - 1. Indicate the Document Locator No. in the space provided therefore. The no. shall be composed of the RDO No., T (code for this kind of tax), serial no. of the return, quarter and year. Example: BIR Form 33.02 (as revised) received in January, 1985 by the Collection Agent of Taguig (the municipality of Taguig is under RDO 35 Pasig) Assuming that this is the first return to be numbered the document Locator No. is 35-T-0000001-85. It will be noted that the column for quarter is left blank because the return is filed weekly and therefore the column for quarter does not apply. 2. Segregate and transmit original copy of the returns to the Administrative Branch for safekeeping; 3. Forward the duplicate copy of the returns to the Banks, Financing and Insurance Division; 4. Prepare the monthly report on the form attached as Annex B for submission to National Assessment Office on or before the 10th day of the succeeding month, copy furnished Banks, Financing and Insurance Division. D. Banks, Financing and Insurance Division shall - 1. Review all BIR Form 33.02, as revised, to make certain that the returns conform with pertinent rules and regulations; 2. Undertake the audit and verification of the Foreign Exchange Transaction Tax Returns. This shall be separate and distinct from its regular examination of the cases within its jurisdiction. Transitory Provision: All duplicates of Foreign Exchange Transaction Tax Returns still with the RDO covering transactions beginning October 15, 1984 shall be immediately forwarded to the Banks, Financing and Insurance Division for appropriate action. Repealing Clause: All regulations, rules, orders or portions thereof which are inconsistent with this Order are hereby revoked. Effectivity: This Order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner