Presidential Decree No. 370 Enlarging the Coverage of the Tax Amnesty on Previously Untaxed Income and/or Wealth

January 14, 1974 REVENUE REGULATIONS NO. 02-74 SUBJECT : Presidential Decree No. 370 Enlarging the Coverage of the Tax Amnesty on Previously Untaxed Income and/or Wealth, Subject to Certain Conditions TO : All internal revenue officers and others concerned Pursuant to Section 4 of Presidential Decree No. 370, the following regulations implementing said Decree which enlarges the coverage of the tax amnesty on previously untaxed income and/or wealth are hereby promulgated and shall be known as Revenue Regulations No. 2-74. aisa dc SECTION 1. Scope . These regulations shall cover all cases of voluntary disclosures of previously untaxed income and/or wealth such as earnings, receipts, gifts, bequests or any other acquisitions from any source whatsoever which are taxable under the National Internal Revenue Code, as amended, realized in the Philippines or abroad by any taxpayer, natural or juridical. Said untaxed income and/or wealth shall not have been the subject of, nor previously declared in amnesty returns filed under Presidential Decree Nos. 23, as amended and 157. SECTION 2. What is "previously untaxed income and/or wealth" . The term "previously untaxed income and/or wealth" means: (a) In the case of an individual, all earnings, receipts, gifts, bequests or any other acquisitions from any source whatsoever which are taxable under the National Internal Revenue Code which he, knowingly or unknowingly, failed to declare for internal revenue tax purposes in any year prior to 1973. If such be incapable of exact determination then the total increase in his equity or net worth up to the calendar year ending December 31, 1972. (b) In the case of a juridical person, all taxable earnings, receipts, gifts, bequests or any other acquisitions from any source whatsoever, which it knowingly or unknowingly, failed to declare for internal revenue tax purposes in any taxable year prior to January 1, 1973. SECTION 3. Tax Imposed . A tax of fifteen per centum (15%) on such previously untaxed income and/or wealth shall be paid in lieu of all internal revenue taxes including the increments or penalties on account of non-payment imposed under the National Internal Revenue Code, subject to the conditions enumerated in Section 5 hereof. The payment of the tax imposed under this section shall not subject the taxpayer to any investigation, whether civil, criminal or administrative, insofar as such previously untaxed income and/or wealth is concerned. Such payment shall relieve the taxpayer from all civil, criminal or administrative liabilities arising from or incident to the disclosure under the National Internal Revenue Code, the Revised Penal Code, the Anti-Graft and Corrupt Practices Act, the Revised Administrative Code, the Civil Service Laws and Regulations, laws and regulations on Immigration and Deportation, or any other applicable law or proclamation. The taxes collected herein shall accrue to the General Fund and an appropriate Tax Numeric Code shall be assigned by the Commissioner of Internal Revenue for this purpose. SECTION 4. Cases not covered by amnesty . The following cases are not covered by the amnesty subject to these regulations: (1) Capital gains transactions where the taxpayer has availed of Presidential Decree No. 16, as amended, but has not complied with the conditions thereof; (2) Tax liabilities with or without assessments, on withholding tax at source provided under Sections 53 and 54 of the National Internal Revenue Code, as amended; (3) Tax liabilities with assessment notices issued as of December 31, 1973; (4) Tax cases which are the subject of a valid information under Republic Act No. 2338 as of December 31, 1973; and (5) Property transferred by reason of death or by donation during the year 1972. SECTION 5. Condition under which amnesty may be granted . The tax on previously untaxed income and/or wealth referred to in Section 3 hereof shall be accepted under the following conditions: (a) Such previously untaxed income and/or wealth must have been earned or realized prior to 1973; (b) The taxpayer must file a return with the Commissioner of Internal Revenue on or before June 28, 1974, showing previously untaxed income and/or wealth in the prescribed BIR Form; (c) If such previously untaxed income and/or wealth, or part thereof, consist of cash hoarded abroad, such cash must be repatriated and deposited with any bank in the Philippines or invested as entrepreneur or 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 companies; or utilized in the purchase of new issues of the following instruments: 1. Government bonds; 2. Government securities; 3. Government debentures; 4. Bonds, notes or other commercial papers issued by domestic corporations. Such investment must be made within six (6) months from the date of such disclosure. The shares of stocks or instruments are not to be disposed of, transferred, assigned or conveyed within a period of three (3) years from the date of said investment. SECTION 6. Return required . (a) Where to file . The return required under these Regulations shall be filed with the Office of the Commissioner of Internal Revenue, Regional or Revenue District Office. (b) When to file . The return must be filed on or before June 28, 1974. No extension of time to file said return shall be granted for any reason whatsoever. (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 account number; 3. A disclosure of how much his previously untaxed income and/or wealth amount to; and 4. If such previously untaxed income and/or wealth, or part thereof, consist of hoarded cash abroad, a statement of the amount thereof. SECTION 7. Payment of the tax ; effect of payment . The tax imposed herein must be paid within the following period: a. If the amount due does not exceed P10,000.00, the tax must be paid at the time of the filing of the return, but not later than June 28, 1974; b. If the amount due, exceeds P10,000.00 but does not exceed 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 June 28, 1974, and the second installment shall be paid on or before September 30, 1974; c. If the amount due exceeds P50,000.00 but does not exceed P300,000.00, the tax may be paid in three equal installments, according to the following schedule: (1) The first installment shall be paid upon the filing of the return but not later than June 28, 1974; (2) The second installment shall be paid on or before September 30, 1974; (3) The third installment shall be paid on or before December 31, 1974. d. In meritorious cases and where the amount 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 return, but not later than June 28, 1974 and the last installment not later than May 31, 1975. SECTION 8. What is hoarded cash abroad . The term "hoarded cash abroad" means cash in any currency located abroad whether kept in private vaults, safe deposit boxes or in foreign bank deposits. Such cash hoarded in any foreign country shall include all cash and/or cash items such as traveller's cheques, bank money orders, bank drafts, certificates of time deposits, bank manager's checks, negotiable letters and the like. SECTION 9. Investment of hoarded cash abroad required . Hoarded cash abroad, as defined in Section 8 hereof, which forms part or all, of the previously untaxed income and/or wealth must be deposited with any bank in the Philippines or invested in the manner and under the conditions prescribed in Section 5 hereof, within six (6) months from the time of the disclosure but not later than December 28, 1974. SECTION 10. Notice of bank deposit or investment required . In case the hoarded cash abroad is deposited in any bank in the Philippines in compliance with these Regulations, the taxpayer shall be required to submit to the Commissioner of Internal Revenue within thirty (30) days after such deposit has been made a certificate of bank deposit covering the amount stated in his return. If such hoarded cash is not deposited but is invested pursuant to these Regulations, such investment shall be reported to the Commissioner of Internal Revenue within thirty (30) days after such investment is made. The report of such investment must contain the following information: 1. Name and address of the taxpayer; 2. Taxpayer Account Number; 3. Kind of investment made; and 4. Amount of investment. SECTION 11. Penal Provision . (a) Failure to comply with conditions . Failure to comply with any of the conditions and requirements set forth in these Regulations shall nullify the immunity provided for in Presidential Decree No. 370. (b) Failure to pay the tax on time . The amnesty under Presidential Decree No. 370, as amended, shall be granted only after the tax imposed herein shall have been paid. This means not only that the tax must be paid in full but also that such tax must be paid within the time prescribed under Section 7 hereof. Failure to pay the tax, or any installment thereof, on time will nullify the taxpayer's right to claim the immunity granted by the said Presidential Decree. The Commissioner of Internal Revenue shall, in such cases of failure to comply with any condition or to pay the tax on time, compute the internal revenue taxes in accordance with the tax rates prevailing in 1972 on the whole amount of such previously untaxed income and/or wealth, as provided for in the National Internal Revenue Code, as amended, and apply the penal provisions of the said Code. SECTION 12. Treatment and Disposition of the Returns . (a) Upon filing of the return, the same shall be kept confidential and shall not be subject to verification. After the tax shall have been paid by the taxpayer, all returns 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 returns filed pursuant to these Regulations. (b) Returns filed pursuant to these regulations shall not be examined, inquired or looked into by any person, government official, bureau or office. Any government official who shall make or attempt to make such inquiry shall be guilty of grave misconduct for which he may be summarily dismissed from the service. Disclosure of any information relating to the declaration shall subject the offender to an imprisonment of not more than five years. The returns 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. SECTION 13. Effectivity . These Regulations shall take effect immediately. CESAR VIRATA Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5