Further Amendment to Section 243 of Revenue Regulations No. 2 (Income Tax Regulations)

February 25, 1977 REVENUE REGULATIONS NO. 02-77 SUBJECT : Further Amendment to Section 243 of Revenue Regulations No. 2 (Income Tax Regulations), Concerning Information Returns as to Payments of P1,800 or More TO : All internal revenue officers and other concerned SECTION 1. Scope . Pursuant to the provisions of Section 338 of the National Internal Revenue Code, Section 243 of Revenue Regulations No. 2, otherwise known as the Income Tax Regulations, as amended by Revenue Regulations No. 8-76 and Revenue Regulations No. 1-77, implementing Section 77 of the same Code, is hereby amended as follows: cdta "Section 243. Information return on aggregate payments of P1,800 or more . All persons, including corporations, partnerships, and associations, making payment to another person of fixed or determinable income in an aggregate amount of P1,800 or more in a calendar year must render a return thereof to the Commissioner of Internal Revenue on or before the thirty-first day of January of the succeeding year. "The return shall be made on BIR Form 1701B. Such returns shall be accompanied by an alphabetical list, in duplicate, showing the recipient's (payee's) name, taxpayer account number, and current business address (if engaged in business or the practice of a profession) or residential address (if not so engaged), or at least the address of the payee appearing in the payor's record at the time of payment. "The information returns (BIR Form 1701B) together with the original copy of the alphabetical list, shall be filed with the Revenue Regional Director, Revenue District Officer, or Collection Agent where the principal Office or residence of the payor is located. An acknowledged copy of the alphabetical list shall be attached by the payor to the original copy of his income tax return for the year payments were made. It shall be the responsibility of the payee-recipient to keep a record of all the fixed or determinable income received from payors and to report the same in his income tax return. "Where the payor files its income tax return on a fiscal year basis, it shall attach the acknowledged copy of the alphabetical list for payments made during the preceding calendar year. "The names of all persons to whom annual payments of P1,800 or more were made, whether such total sum is made up of rents, royalties, annuities, interests, pensions, shares of profits, and dividends, salaries, wages, fees, commissions or compensation in any other form which were not subjected to withholding, and other fixed or determinable income, must be reported. Payments in kind, such as living quarters, meals, and lodging, stocks, other personal property, etc., are taxable income to the recipient and, as such, its money value should be included. "The information returns prescribed herein shall also be filed, regardless of the amount of interest paid upon bonds and mortgages or deeds of trust or other similar obligations of corporations. In the case of payments of annual or periodical income to nonresident alien individuals or to foreign corporations or firms not engaged in trade or business within the Philippines and intercorporate dividends which were subjected to withholding, the return by the withholding agents shall constitute and be treated as return of information under Section 77 of the National Internal Revenue Code." SECTION 2. Transitory provisions . (a) Indication of tax account number . The requirement to indicate the taxpayer account number of the payee shall be directory for purposes of filing the information returns (BIR Form 1701B) covering fixed or determinable income payments for the calendar year 1976 which are due to be filed in 1977. However, this requirement shall be mandatory for information returns to be filed for succeeding years. (b) Extension to file 1976 information returns and accompanying statements . BIR Form No. 1701B and accompanying alphabetical list covering 1976 income payments may be filed on or before March 15, 1977. Thereafter, all BIR Form 1701B covering income payments for succeeding calendar years shall be filed on or before January 31 of the succeeding year. SECTION 3. Effectivity . Except as otherwise specifically provided, these regulations shall take effect on January 1, 1977 beginning with information returns as to payments made in the year 1976. ALFREDO PIO DE RODA Actg. Secretary of Finance Recommended by: EFREN I. PLANA Acting Commissioner of Internal Revenue TAN 1456-040-3