Presidential Decree No. 157 Re: Tax Amnesty on Unreported/ Unrecorded Income/Wealth/Acquisition Realized in Year 1972

March 19, 1973 REVENUE REGULATIONS NO. 03-73 SUBJECT : Presidential Decree No. 157, dated March 16, 1973, Proclaiming a Tax Amnesty on Unreported/ Unrecorded Income/Wealth/Acquisition realized in the year 1972 TO : All Internal Revenue Officers and Others Concerned SECTION 1. Scope . These regulations shall cover all cases of voluntary disclosures by taxpayers, natural or juridical, of unreported/unrecorded income/wealth/acquisition realized in the year 1972. SECTION 2. Extent of the Tax Amnesty . All the immunities and benefits afforded taxpayers under Presidential Decree No. 23, as amended, are extended to taxpayers availing of Presidential Decree No. 157, dated March 16, 1973. cdt SECTION 3. Who may avail of the amnesty . Only those who have properly availed of Presidential Decree No. 23, as amended, may take advantage of the amnesty under Presidential Decree No. 157. SECTION 4. Conditions to grant of amnesty . The following conditions must be complied with by those who wish to avail of the amnesty and have qualified under Section 3 hereof: a. An income tax return must be filed for the taxable year 1972, in the case of taxpayers on the calendar year basis. b. In the case of taxpayers on the fiscal year basis, the income tax return to be filed shall cover a period up to December 31, 1972, only. It shall be considered as a complete return for one taxable year. c. In both cases, the income tax return must be filed on or before April 16, 1973, and shall be accompanied by a "Supplementary Statement, 1972" as prescribed in Section 6 hereof. d. Taxpayers on the fiscal year basis who shall avail of the amnesty under Presidential Decree No. 157 will have to prepare two income tax returns: one for the period up to December 31, 1972 which shall be filed on or before April 16, 1973 and another for the period from January 1, 1973 to the last day of its fiscal year which shall yet be filed on or before the 15th day of the fourth month after the close of the fiscal year. SECTION 5. Determination of Amount of Amnesty Tax . The amount of tax to be paid pursuant to Presidential Decree No. 157 is to be determined in the following manner: a. The tax to be paid, in the case of taxpayers on the calendar year basis shall be the amount shown in the 1972 income tax return or, the amount equal to the income tax paid for the taxable year 1971 plus 40% thereof, whichever is higher; b. In the case of taxpayers on the fiscal year basis, the tax to be paid shall be higher of the following two amounts: (1) The amount shown on the return filed; or (2) An amount which is the sum of (a) an amount which bears the same ratio to the income tax paid for the immediately preceding fiscal year as the period covered by the return required herein to be filed bears to one entire fiscal year and (b) 40% of the amount determined in item (2)(a) of this sub-paragraph, as illustrated below: aisa dc FORMULA : No. of months (1972) x Amount of income tax paid in 1971 = P 12 Add: 40% of income tax paid in 1971 Basis of comparison with 1972 tax due P ====== Note: Whichever of the two (2) amounts is greater shall become due and payable. ILLUSTRATION : The X Corporation makes its return on the basis of the fiscal year which begins on April 1. For fiscal year 1972 (April 1, 1971 to March 31, 1972), it paid a total income tax in the amount of P10,000. Since it wishes to avail of the amnesty under Presidential Decree No. 157, its accountant prepared an income tax return for a period up to December 31, 1972 (April 1 December 31, 1972), in which is shown the amount of P8,000.00 as income tax due. The amount that the X Corporation should pay upon filing of the 1972 income tax return is P10,500.00, computed as of the 1972 income tax return is P10,500.00, computed as follows: a. Income tax due per the 1972 income tax return P8,000.00 b. Total income tax paid for FY 1972 (April 1/71 - March 31/72 P10,000.00 c. Period covered by the 1972 return (April 1- Dec. 31/72 9 months d. Ratio of 9 months to one fiscal year 3/4 e. 3/4 of P10,000 P7,500.00 Add: 40% thereof 3,000.00 Total P10,500.00 P10,500.00 Since the proportionate amount of the income tax paid in 1971 plus 40% thereof is higher than the income tax due on the return to be filed, then the tax to be paid by the X Corporation under Presidential Decree No. 157 is P 10,500.00. c. For the purpose of determining the income tax paid in 1971, contested or disputed assessment which are pending resolution shall not be taken into account. If the 1971 income tax was paid under Presidential Decree No. 68, the full amount shall be taken as a basis for comparison as if the tax was paid in full. And if a return was filed in 1971 but no income tax was paid because there was no amount subject to tax or was otherwise exempt, the amount to be paid under these regulations shall be that shown on the 1972 return. SECTION 6. In order to readily arrive at the correct amount due and payable upon filing of the income tax return, a "SUPPLEMENTARY STATEMENT, 1972" in duplicate, shall accompany the income tax return to be filed for the taxable year 1972 of all those who may elect to avail of the tax amnesty under Presidential Decree No. 157. Two (2) xerox copies of the following documents must be attached to the "Supplementary Statement, 1972": 1. Income Tax Return for 1971; and 2. Official Receipts of payments made in 1971. SECTION 7. Installment Payments . (a) If the amount is P5,000 or less, the tax shall be paid upon filing of the return but not later than April 16, 1973. (b) If the amount is over P5,000, the tax may be paid in two equal installments, in which case the first installment shall be paid upon filing of the return but not later than April 16, 1973, and the second installment shall be paid on or before July 15, 1973. SECTION 8. Effect of Non-compliance with conditions . Failure to comply with any of the conditions and requirements set forth in these regulations as well as to pay the tax on time shall nullify the immunities and benefits provided under Presidential Decree No. 157, in relation to Presidential Decree No. 23, as amended by Presidential Decree No. 67. SECTION 9. Treatment and Disposition of Income Tax Returns . (a) All income tax returns and statements filed in pursuance of Presidential Decree No. 157 shall be kept confidential and shall not be subject to verification. Such returns and statements shall be kept in a secret file in the Bureau of Internal Revenue. Section 81 of the National Internal Revenue Code, as amended, providing for the disposition of income tax returns and publication of lists shall not apply to the aforesaid returns and statements. (b) Statements and returns filed as well as payments made pursuant to these regulations shall not be examined, inquired or looked into by any person, government official, bureau of office. Disclosure of any information relating to the declaration shall subject the offender to an imprisonment of not more than two years. SECTION 10. Effectivity . The provisions of these regulations are effective immediately. (SGD) ALFREDO PIO DE RODA Acting Secretary of Finance Recommended by: (SGD) MISAEL P. VERA Commissioner of Internal Revenue B.I.R. FORM "A" SUPPLEMENTARY STATEMENT, 1972 (To be filed with 1972 income tax returns on the calendar year basis pursuant to Presidential Decree No. 157.) _____________, 1973 The Commissioner of Internal Revenue Finance Building Manila Sir: I hereby apply for tax amnesty under Presidential Decree No. 157, dated March 16, 1973, and in this connection, I declare: 1. That the amount of income tax I should pay for the year 1972 in pursuance of the said Presidential Decree No. 157 is __________________________ Pesos (P________), computed as follows: a. Income tax due per 1972 income ____________ tax return, attached hereto ____________ b. (1) Income tax paid for the year 1971 (per return and deficiency assessment, if any) P______ (2) Add: 40% thereof ______ (3) Total of income tax paid for the ____________ year 1971 plus 40% thereof P========== 2. That I have availed of the amnesty provided under Presidential Decree No. 23, as amended by Presidential Decree No. 67. Income Tax Paid in 1971 O.R. No. Date Amount Place of Payment ________ ______ P____ _____________ NOTE: Attached a xerox or photostat copy each of the 1971 income tax returns filed and official receipts of Payment of income tax for the year 1971. Very truly yours, ____________________ (Name _________________________ (Address) _________________________ (Tax Account Number) B.I.R. FORM "B" SUPPLEMENTARY STATEMENT, 1972 (To be filed with 1972 income tax returns on the fiscal year basis pursuant to Presidential Decree No. 157.) _____________, 1973 The Commissioner of Internal Revenue Finance Building Manila Sir: I hereby apply for tax amnesty under Presidential Decree No. 157, dated March 16, 1973, and in this connection, I declare: 1. That the amount of income tax I should pay in pursuance of Presidential Decree No. 157, dated March 16, 1973, is ______________________________ Pesos (P________________), computed on the basis of the following facts: a. Income tax due per the 1972 income tax return, attached hereto P____________ b. Total income tax paid for the immediately preceding fiscal year (per return plus deficiency assessment, if any) P____________ c. Period covered in months by the 1972 income tax return ____________ d. The ratio of the number of months covered by the 1972 return to one fiscal year ____________ e. Amount to be used as basis for Item d x Item b P____________ Add: 40% thereof ____________ TOTAL P____________ 2. That I have availed of the amnesty provided under Presidential Decree No. 23, as amended by Presidential Decree No. 67. Income Tax Paid in 1971 O.R. No. Date Amount Place of Payment ________ ______ P____ _____________ NOTE: Attached a xerox or photostat copy each of the 1971 income tax return filed and official receipt of Payment of income tax for the year 1971. Very truly yours, ____________________ (Name _________________________ (Address) _________________________ (Tax Account Number)