Filing of Monthly Percentage Tax Return and Payment of the Tax Due Thereon

March 10, 1964 REVENUE REGULATIONS NO. 03-64 SUBJECT : Filing of Monthly Percentage Tax Return and Payment of the Tax Due Thereon TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 338, in relation to Section 4, both of Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code, the following regulations relative to the filing of monthly percentage tax return and payment of the taxes due thereon are hereby promulgated and shall be known as Revenue Regulations No. 3-64. cdt SECTION 1. Who Shall File . It shall be the duty of every person conducting a business on which a percentage tax is imposed under Title V of the National Internal Revenue Code (Sections 184, 185, 186, 189, 191, 192 and 195), to make a true and complete return of the amount of his, her or its gross monthly sales, receipts or earnings, or gross value of output actually removed from the factory or mill warehouse within twenty (20) days after the end of each month and pay the tax due thereon. Where any person retires from business subject to the percentage tax provided in the above-mentioned sections, he shall immediately notify the nearest internal revenue officer, file his return or declaration, and pay the tax due thereon within twenty (20) days after closing his business. SECTION 2. Where to File . The return should be filed in duplicate under BIR Form No. 25.021-A (Annex A) and must be verified by the oath of the party rendering it. The returns (original and duplicate) must be filed with the Collection Agent and/or Cash Clerk of the City or municipality where the place of business is located and where the books of accounts are kept within twenty (20) days after the end of each month. If no Collection Agent or Cash Clerk is assigned to the municipality or municipal district, the return should be filed with the Municipal Treasurer thereat. SECTION 3. When to Pay . The total amount of percentage tax due as shown in the return must be paid within twenty (20) days after the end of each month preferably at the same time as the filing of the return. SECTION 4. Preparation of the Return . The taxpayer is required to fill in the appropriate schedule in the return corresponding to his business or businesses and a summary thereof together with the computation of the tax due must likewise be prepared in the appropriate space provided for in the future. When the articles are manufactured locally and sold on installment term of at least twelve months, the percentage taxes established in section one hundred eighty-four, one hundred eighty-five, and one hundred eighty-six of the National Internal Revenue Code shall be based on the cash prices of the articles, cash price being defined as the price at which an article is offered for sale on cash term to the public without any discount and/or rebate whatsoever during the tax period. SECTION 5. Application of Tax Credit and Payment by Check . If the taxpayer has any tax credit which is being deducted from the tax due in the return, the original of the letter evidencing the tax credit must be presented to the Collection Agent, Cash Clerk or Municipal Treasurer, if there is no Collection Agent or Cash Clerk assigned, for proper annotation of payment. If payment is to be made by check or money order such check or money order must be drawn payable to the order of the Commissioner of Internal Revenue or to the Collection Agent and/or Cash Clerk of the municipality or city where the tax is being paid or to the Municipal Treasurer, if no Collection Agent or Cash Clerk is assigned to the municipality or municipal district. SECTION 6. Keeping of Records . The books of accounts and other records from which the figures shown in the percentage tax return were based should always be kept on file at the principal place of business of the taxpayer and shall be subject to inspection by internal revenue officers duly authorized to examine the books of accounts of the said taxpayer. Invoices, receipts and other supporting papers and documents relating to deductions from sales or receipts should be filed separately, kept and preserved in the manner prescribed by Revenue Regulations No. V-1. The books of accounts and other records shall be maintained for a period of five years from the date of the last entry in the said books and records. SECTION 7. Transmittal of Returns . All Collection Agents, Cash Clerks and Municipal Treasurers who receive the monthly percentage tax returns shall forward both copies (original and duplicate) to the Regional Office, within the month the returns are filed, duly listed. The list should contain the name of the taxpayer, address, amount paid and official receipt number. SECTION 8. Processing of Returns . The Regional Office shall process the returns in the same manner as the processing of income tax returns, particularly the listing, auditing, numbering and separation of original and duplicate. SECTION 9. Examination of Return . The duplicates shall be kept in the Income & Business Tax Branch, and shall be released for examination once every six months only. Examination of monthly percentage tax returns shall be done only twice a year, to cover the period from January to June and July to December, if the taxpayer is on a calendar year basis; if on a fiscal year basis, the return should be investigated on a semi-annual basis. SECTION 10. Penal Provisions . If the percentage tax on any business is not paid within the time specified, the amount of the tax shall be increased by twenty five per centum, the increment to be a part of the tax. In case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount in addition to the 25% surcharge for late payment. The amount so added to any tax shall be collected at the same time and in the same manner as part of the tax unless the tax is being paid before the discovery of the falsity or fraud in which case the amount so added shall be collected in the same manner as the tax. Any person who shall fail or neglect to make a return or pay the percentage taxes prescribed in Sections 184, 185, 186, 189, 191, 192 and 195 of the National Internal Revenue Code within the time prescribed in Section 183 of the same Code shall be punished by a fine in a sum not exceeding P1,000.00 or by imprisonment for a term not exceeding six (6) months, or both. Any person who shall make a false or fraudulent return shall, besides being liable to the surcharge prescribed in the preceding paragraph, be punished by a fine of not less than P2,000.00 nor more than P10,000.00 and by imprisonment of not less than six (6) months but not more than six (6) years. Any person who shall violate any provisions of this Regulation, for which violation the National Internal Revenue Code or any other law does not provide any specific penalty, shall be penalized under Section 352 of the aforesaid Code by a fine of not more than P300.00 or by imprisonment of not more than six (6) months, or both. SECTION 11. Repealing Provision . The provisions of Revenue Regulations No. V-3 and any other regulation or circular inconsistent herewith are hereby repealed. SECTION 12. Date of Effectivity . These regulations shall take effect on April 1, 1964 and the return required herein shall start from the month of April. RUFINO G. HECHANOVA Secretary of Finance Recommended by: BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue ATTACHMENT 1. Who must File? Every person conducting business on which a percentage tax is imposed under Title V of the National Internal Revenue Code (Sections 184, 185, 186, 189, 191, 192 and 195) is required to make a true and complete return of the amount of his, her or its gross monthly sales, receipts or earnings, or gross value of output actually removed from the factory or mill warehouse. In order to be properly credited with the tax paid, the name, trade name and address of the taxpayer should be typewritten or printed in black letters in the spaces provided thereto. 2. Where and When To File? File your return in duplicate with the Collection Agent of the city or municipality where your place of business is located and where your books of accounts are kept, within twenty (20) days after the end of each month. 3. Payment of Tax . The total amount of percentage tax due as shown on line 8 must be paid within twenty (20) days after the end of each month preferably at the same time as the filing of the return. 4. Preparation of Return . Before entries are made on the summary appearing on page one of the return, fill in the schedules applicable to your business subject to percentage tax. Line 6 should indicate the total percentage taxes as shown in all the schedules. Under line 7 indicate the amount of any tax credit due you. Present the original of the letter evidencing the tax credit to the Collection Agent for proper annotation of payment. If payment is made by check or money order, make such check or money order payable to the order of the Commissioner of Internal Revenue. 5. Keeping of Records . Keep on file at your principal place of business and where your books of accounts are kept a true copy of this return and accurate records and accounts of all transactions containing sufficient information to indicate whether the correct amount of the tax has been computed and paid. Records and information in support of all credit taken and all deductions, exemptions and adjustments claimed must also be complete. All records shall be maintained for a period of at least five years from the date of the last entry in the records. Such records shall be available and open to inspection by representatives of the Bureau of Internal Revenue duly authorized to make investigations. 6. Penalty . Avoid penalty by filing correct returns on time and by paying the correct tax due with the returns. Sections 183 of the National Internal Revenue Code, as amended, provides a surcharge of 25% of the tax if the percentage tax is not paid within twenty (20) days after the end of each month. A surcharge of 50% of the tax is also imposed if there is willful neglect on your part to file this return or if you file a false and fraudulent return which is in addition to the 25% surcharge for late payment. March 18, 1964 The Director Bureau of Printing M a n i l a S i r : I have the honor to forward herewith a copy of Revenue Regulations No. 3-64, the subject matter of which is the "filing of monthly percentage tax return and payment of the tax due thereon", with the request that it be published in the Official Gazette on the first available issue in view of the fact that the effectivity of same will start from the month of April, 1964. cd Very truly yours, BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue By: P. F. LANDAS Assistant Commissioner for Administration