Procedure in the Processing and Handling of Notices Filed Under Presidential Decree No. 16, Dated October 5, 1972, as Amended by Presidential Decree No. 16A, on the Same Date

December 20, 1972 REVENUE MEMORANDUM ORDER NO. 39-72 SUBJECT : Procedure in the Processing and Handling of Notices Filed Under Presidential Decree No. 16, Dated October 5, 1972, as Amended by Presidential Decree No. 16A, on the Same Date TO : All Internal Revenue Officers, Employees and others concerned In order to achieve coordinated and effective implementation of Presidential Decree No. 16, as amended, and of the regulations governing exemption of capital gains under Section 34 (b) of the National Internal Revenue Code, as amended, the following procedures are hereby prescribed for the guidance of all concerned: I. Forms to be used A. For notice of sale, disposition, transfer or exchange of capital assets, BIR Form 1762 shall be used; B. For notice of investment of proceeds of capital asset sold, disposed, exchanged or transferred, BIR Form 1762A shall be used. II. Receiving and Numbering of Notices A. Receipt of Notices Notices shall be received at the Income Tax Division, in the National Office, Assessment Branch in Regional Offices and Office of the Revenue District Officers. The notices (original and duplicate) as well as all the attachments thereto shall be stamped with the date of receipt of the Notice and signed by the receiving officer. Collection Agents are prohibited from accepting notices filed under the abovestated decree. Instead they shall inform taxpayers to file their notices in the offices authorized to do so. All notices received at the Income Tax Division and Revenue District Offices shall be sorted and transmitted immediately to the Assessment Branches of the region who has jurisdiction over the taxpayer based on his/her address as stated in the Notice. Each transmittal must be accompanied by a listing stating the name and address of the taxpayer filing the notice. B. Numbering of Notices Immediately upon receipt of the Notices of the Assessment Branches, a file number must be assigned to each Notice in accordance with the procedure prescribed below: 34 = Revenue District Code CT = Capital Transaction Notice 07 = Revenue Region Code Number 00001 = Main Serial Number 72 = Year of Transaction Thus, a notice filed in Regional Office No. 7 by a taxpayer residing in Binondo, Sta. Cruz who made a capital asset transaction on November 25, 1972 shall bear the file number as follows: 34-CT-07-00001-72 After numbering, the original of the Notices shall be separated from the duplicates. III. Transmittal to Data Processing Center The original of the Notices shall be bundled in batches of fifty (50) and shall be transmitted to the Data Processing Center accompanied by a block control sheet, while the duplicates shall remain with the Assessment Branches for future reference. IV. Receipt, Numbering and Transmittal of Notices of Investment Since Notices of investment have to be filed within thirty (30) days after investment as required by Revenue Regulations No. 7-72, as amended, such notices shall be processed and handled under the same procedure prescribed for the Notices of Capital Asset Transactions. V. Effectivity The procedures embodied in this memorandum order shall take effect immediately and all those concerned are hereby enjoined to comply strictly with the provisions thereof. MISAEL P. VERA Commissioner of Internal Revenue GENERAL INSTRUCTIONS 1. Who must file . All taxpayers, other than corporations who made transactions involving the sale, disposition or transfer of capital assets contemplated in Section 34(a) (1) of the National Internal Revenue Code and would like to avail of the amnesty under Presidential Decree No. 16 as amended by 16A. 2. Where to file . File this notice in duplicate with the Commissioner of Internal Revenue, Revenue Regional Director, or Revenue District Officer. 3. When to file . All taxpayers availing of the exemptions must file a notice with the Commissioner of Internal Revenue, Regional Director or Revenue District Officer within thirty (30) days after the sale, disposition, or transfer of the capital asset. 4. Conditions and requisites for exemption . In order to avail of the benefits of exemption on the gains realized that corresponds to the proceeds in the sale, disposition, or transfer or exchange of capital assets, the following conditions must be met: A. The proceeds of the transactions must be invested, as initial capital, additional capital contribution or in new issues of capital stocks in any of the preferred areas of productive undertaking, to wit: 1. BOI registered enterprises; 2. NACIDA promoted industries; 3. BTTI sponsored tourist-oriented projects; 4. Export oriented industries; 5. Banks: Rural, Private Development, Commercial; 6. Utilities: transport, communication, power; 7. Agricultural cooperatives; 8. Livestock and other agricultural development projects; 9. Foreign equity in domestic/resident corporations; 10. Insurance co mpanies; or utilized in the purchase of new issues of the following instruments: 1. Government bonds; 2. Government securities other than treasury bills; 3. Government debentures; 4. Treasury notes. B. Such investments must be made within six (6) months from the date the gain is realized. The shares of capital stock government issues representing the investment are not to be disposed of, transferred, assigned or conveyed within a period of three (3) years from the date of said investment. 5. Penalty . Failure to comply with any of the conditions and requirements set forth shall nullify the benefits of the exemption and all the taxes due on the capital gains derived from the original transaction in the capital assets shall be reckoned from the date it should have been paid as if no exemption was granted, with all the interest and penalties for late payment provided for in the National Internal Revenue Code, as amended. BIR FORM 1762A ORIGINAL Date Filed File No. ______ (Receiving Official Will Stamp Here) NOTICE OF INVESTMENT OF PROCEEDS OF CAPITAL ASSET SOLD, DISPOSED OR TRANSFERRED (Required under Presidential Decree No. 16A, dated October 5, 1972, as amended by Presidential Decree No. 16A) ________, 19 ______ The Commissioner of Internal Revenue Manila Sir: In accordance with the provisions of Presidential Decree No. 16, dated October 5, 1972, as amended by Presidential Decree No. 16A, please be informed that the proceeds realized from my capital asset transactions on __________ in the amount P________ were invested as follows: Kind of Date of Investment Where Invested Investment Amount P I hereby declare that this is a true and correct declaration of investment of the proceeds of my capital asset transaction(s) and that I shall comply with all the conditions provided for in the said decree. Very truly yours, ____________ Signature ____________ Name in Print _____________ Address _____________________ Taxpayer Account Number File this Notice in duplicate with the Commissioner of Internal Revenue, regional or revenue district office within thirty (30) days after the investment of cash is made.