Presidential Decree No. 631

January 9, 1975 REVENUE REGULATIONS NO. 01-75 SUBJECT : Presidential Decree No. 63 1 Granting an Ultimate Tax Amn esty on Untaxed Income and/or Wealth Earned or Acquired in 1973 and Prior Years and Immunity from Inves tigation of the Statement of Assets, Liabilities and Net Worth Required by Presidential Decree No. 3 79, as Amended TO : All Internal Revenue Officers and Others Concerned Pursuant to Section 10 of Presidential Decree No. 631, which grants an ultimate tax amnesty on untaxed income and/or wealth earned or acquired in 1973 and prior years and immunity from investigation of the statement of assets, liabilities and net worth required by Presidential Decree No. 379, as amended, the following regulations are hereby promulgated and shall be known as Revenue Regulations No. 1-75. SECTION 1. Scope . These regulations shall cover all cases of voluntary disclosures of untaxed income and/or wealth for 1973 and prior years and the filing or adjustment of statements of assets, liabilities and net worth required under Presidential Decree No. 379, as amended. SECTION 2. Who may avail . The following persons, natural or juridical, may avail of the amnesty granted under Presidential Decree No. 631: a. Those who have not availed of previous amnesty decrees on untaxed income and/or wealth; b. Those who availed of such decrees but did not make a full and complete disclosure of their untaxed income and/or wealth; and, c. Those who failed to declare for taxation purposes their true and correct income or receipts earned or received in 1973, which were taxable under the National Internal Revenue Code, as amended. SECTION 3. What is " untaxed income and/or wealth ." Except as provided in Section 4 hereof, the term "untaxed income and/or wealth" means all earnings, receipts, gifts, bequests or any other acquisitions from any source whatsoever which are taxable under the National Internal Revenue Code but, knowingly or unknowingly, were not declared for internal revenue tax purposes in any year prior to 1974. aisa dc SECTION 4. Cases not covered by amnesty . The following cases are not covered by the amnesty, subject of these regulations: a. Tax liabilities, with or without assessments, on withholding tax at source provided in Sections 53 and 54 of the National Internal Revenue Code, as amended; b. Tax liabilities with assessment notices issued on or before January 6, 1975; c. Criminal cases involving violations of internal revenue laws already filed in court or with the Fiscal's Office on or before January 6, 1975; d. Property transferred by reason of death or by donation or sale, exchange, or other transfers for less than adequate consideration in money or money's worth during the years 1972 and 1973; and, e. Tax cases pending investigation by the Bureau of Internal Revenue by reason of a valid information under Republic Act No. 2338 filed after July 1, 1974 and before January 6, 1975. SECTION 5. Tax imposed . An amnesty tax equivalent to twenty per centum (20%) of such untaxed income and/or wealth shall be paid in lieu of all internal revenue taxes, including the increments and penalties on account of non-payment, imposed under the National Internal Revenue Code, as amended. SECTION 6. Payment of the tax . The amnesty tax imposed herein shall be paid as follows: a. If the amount due does not exceed P5,000.00, the tax must be paid at the time of the filing of the return, but not later than February 28, 1975; b. If the amount due exceeds P5,000.00 but is not more than P50,000.00, the tax may be paid in two equal installments, the first installment to be paid upon the filing of the return but not later than February 28, 1975, and the second installment on or before May 15, 1975; cdt c. If the amount due exceeds P50,000.00, the tax may be paid in three equal installments, to wit: (1) The first installment shall be paid upon the filing of the return but not later than February 28, 1975; (2) The second installment shall be paid on or before May 15, 1975; and, (3) The third installment shall be paid on or before August 15, 1975. d. In highly meritorious cases and where the amount due exceeds P300,000.00, the Commissioner of Internal Revenue may grant extension of time for the payment of the tax in equal installments but the first installment must be paid at the time of the filing of the returns but not later than February 28, 1975, and provided that the extended period of payment by installments does not exceed two years from the date the last installment is originally due. e. If any installment is not paid on the due date thereof, there shall be collected as part of the tax interests upon such unpaid amount at the rate of 14% per annum from the due date of the installment to the date of payment, which must be made not later than three (3) months from the due date of such installment, otherwise, the entire amount including all unpaid installments shall automatically become due on such date, and failure to pay the same within thirty (30) days shall render the amnesty granted herein null and void. SECTION 7. Return required . a. Where to file . The tax amnesty return shall be filed in the prescribed BIR Form with the Office of the Commissioner of Internal Revenue, Revenue Regional Director or Revenue District Officer or with the nearest Philippine Embassy or Philippine Consulate. b. When to file . The return must be filed on or before February 28, 1975. c. What must be contained in the return . The return must contain the following: (1) The taxpayer's name and address; (2) The taxpayer's tax account number; and, (3) A full and complete disclosure of his untaxed income and/or wealth earned or acquired in 1973 and prior years, but in no case shall the untaxed income or wealth disclosed for amnesty purposes be less than the difference between the total value of assets as adjusted and the value of assets per original statement. SECTION 8. Filing or Adjustment of Statement of Assets, Liabilities and Net Worth ; Exception . a. A taxpayer availing of the amnesty under Presidential Decree No. 631, who had already filed the statement of assets, liabilities and net worth required under Presidential Decree No. 379, as amended, must file together with the tax amnesty return the following: (1) An amended statement of his assets, liabilities and net worth as of December 31, 1973, which shall indicate the particular asset(s) to which the untaxed income and/or wealth pertains; and, (2) A xerox or certified true copy of the original statement of assets, liabilities and net worth which, as mentioned in subsection a of this section, he had previously filed in pursuance of Presidential Decree No. 379, as amended. b. If the taxpayer availing of the amnesty had taxed assets amounting to less than P50,000.00 as of December 31, 1973, which, when added to the hidden income and/or untaxed wealth disclosed in the tax amnesty return, would amount to P50,000.00 or more, he should file together with the return, the statement of assets, liabilities and net worth required under Presidential Decree No. 379, as amended. However, if the value of the taxed assets, when added to such untaxed income and/or wealth is less than P50,000.00, the filing of the said statement shall not be required. The statement of assets, liabilities and net worth required to be filed under these regulations shall be accomplished, filed, and/or submitted in the manner and form prescribed in Revenue Regulations No. 4-74, dated May 15, 1974, insofar as applicable. SECTION 9. Immunities and Guarantees . Upon payment of the tax prescribed in Section 1 and in the manner provided in Section 6, both of Presidential Decree No. 631, the taxpayer shall be relieved from any liability to any internal revenue tax otherwise due and payable on such untaxed income and/or wealth, including any increment thereto and penalty on account of non-payment, as well as from all civil, criminal, or administrative liabilities arising from or incident to the filing of the tax amnesty return under the National Internal Revenue Code, Revised Penal Code, Anti-Graft and Corrupt Practices Act, Revised Administrative Code, Civil Service Laws and Regulations, Immigration and Deportation laws and regulations, and any other law, decree or proclamation. Furthermore, the taxpayer shall not be subject to any investigation, whether civil, criminal or administrative insofar as such previously untaxed income and/or wealth is concerned and the taxpayer's tax amnesty return shall not be used as evidence against, or to the prejudice of, the declarant in any proceeding before any court of law or body, whether judicial, quasi-judicial or administrative, in which he is a defendant or respondent, and such declaration shall not be examined, inquired or looked into by any person, government official, bureau or office. And, finally, his books of accounts and other records for 1973 and prior years shall be considered closed and shall not be subject to any examination, except in connection with the verification of the validity or correctness of a claim for or grant of any tax refund, tax credit (other than refund or credit of withheld taxes on wages), tax incentive and/or exemptions under existing laws, upon written authority of the Commissioner of Internal Revenue. Any person who avails of the amnesty provided in Presidential Decree No. 631 shall also enjoy the immunities and guarantees provided in Section 6 of the said Decree with respect to the statement of assets, liabilities and net worth he filed under Presidential Decree No. 379, as amended, or to the amended statement he files pursuant to Section 3 of the said Decree, and such statement of assets, liabilities and net worth shall likewise be given the same treatment and regard as the amnesty return he files under this decree, except in the determination of his future tax liabilities. For this purpose, the net worth appearing on such statement shall be considered as his valid and correct net worth as of January 1, 1974. SECTION 10. Disposition of Taxpayer's Records . Subject to rules and regulations to be promulgated by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue, the Bureau of Internal Revenue shall take appropriate steps towards the destruction of all the records in its possession pertaining to a taxpayer, natural or juridical, who has availed of the amnesty granted under Presidential Decree No. 631 except with respect to those cases enumerated in Section 2 and those referred to in Section 6, both of Presidential Decree No. 631. Such records, pending their destruction, cannot be introduced as evidence in any proceeding against the taxpayer, whether civil, criminal or administrative. SECTION 11. Treatment of unexplained increase in net worth ; penalties . Any unexplained increase in the taxpayer's net worth after January 1, 1974 shall be presumed as taxable income in the year when such increase occurred, was established, or discovered. In case he attributes the increase to any asset or disposal of any asset which are not included in the statement of assets, liabilities and net worth he filed under Presidential Decree No. 379, as amended, he shall be presumed to have filed a fraudulent statement and shall, upon conviction, pay a fine of not more than Five Thousand (P5,000.00) Pesos and suffer imprisonment of not more than five (5) years. If the taxpayer is 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 more than Five Thousand Pesos (P5,000.00) and suffer imprisonment of not more than five (5) years. SECTION 12. Effects of failure to comply with requirements . Failure to comply with the requirements set forth in Presidential Decree No. 631 and in these regulations shall nullify the immunities and guarantees provided for in said decree. The Commissioner of Internal Revenue shall, in such case compute the internal revenue tax liabilities of the taxpayer in accordance with the tax rates prevailing in 1973, as provided for in the National Internal Revenue Code, as amended, on the whole amount of such previously untaxed income and/or wealth, and apply the penal provisions of the said Code. SECTION 13. Treatment and disposition of the tax amnesty returns and statements of assets, liabilities and net worth . The tax amnesty returns and statements of assets, liabilities and net worth, shall be kept confidential and shall not be subject to verification except as provided in Section 9 hereof. After the tax shall have been paid by the taxpayer, all returns and statements filed pursuant to these regulations shall be kept in a secret file in the Bureau of Internal Revenue. Section 81 of the National Internal Revenue Code, as amended, providing the disposition of income tax returns and publication of lists shall not apply to the said returns and statements. SECTION 14. Penalty for unlawful disclosure . It shall be unlawful for any person having knowledge of the tax amnesty return and statement of assets, liabilities and net worth filed pursuant to Presidential Decree No. 631 to disclose any information relative to such return and any violation thereof shall subject the offender to a fine in the amount of not less than Five Thousand Pesos (P5,000.00) or imprisonment for not less than two (2) years nor more than five (5) years or both. Any person who would inquire, question or attempt to inquire into the tax amnesty return and statement filed by any taxpayer pursuant to Presidential Decree No. 631 shall be guilty of grave misconduct for which he may summarily be dismissed from the service. However, the said statement of assets, liabilities and net worth may be utilized in the determination of the filer's future tax liabilities as provided in Section 7 of the said Decree and Section 9 of these implementing regulations. SECTION 15. Repealing Clause . Presidential Decree No. 631 provides that any provision of law, decree, rule or regulation inconsistent with said Decree is hereby revoked or amended accordingly. SECTION 16. Effectivity . These regulations shall take effect immediately. ALFREDO PIO DE RODA, JR. Acting Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5