Implementing Presidential Decree No. 379, dated January 21, 1974, as amended

May 15, 1974 REVENUE REGULATIONS NO. 04-74 SUBJECT : Implementing Presidential Decree No. 379, dated January 21, 1974, as amended by Presidential Decree No. 417, dated March 19, 1974, requiring the submission of Statement of Assets, Liabilities and Net Worth as of December 31, 1973 TO : All Internal Revenue Officers and Others Concerned Pursuant to Section 10 of Presidential Decree No. 379, as amended, the following regulations requiring the submission of statement of assets, liabilities and net worth are hereby promulgated for the guidance of all concerned and shall be known as Revenue Regulations No. 4-74. SECTION 1. Scope . These regulations shall govern the submission of the statement of assets, liabilities and net worth required under Presidential Decree No. 379 as amended by Presidential Decree No. 417. SECTION 2. Who must file . (a) All persons, whether natural or juridical, having gross assets of Fifty Thousand Pesos or more as of December 31, 1973, regardless of the net worth, shall file a statement of all assets, liabilities and net worth in the form prescribed. In the case of minors, insane and/or other incapacitated persons, the statement shall be filed by their guardians. In the case of juridical persons, the President, Manager or any other person in charge of the management or affairs of the business shall be the one to file the statement. cdt (b) Public officers in the government service as of December 31, 1973, regardless of the amount of their gross assets. (c) Married individuals who are not legally separated should file only one statement, which should contain the consolidated assets, liabilities and net worth of the spouses. SECTION 3. When to file ; copies to be filed . (a) The statement of assets, liabilities and net worth required in these regulations shall be filed on or before September 30, 1974. (b) The statement shall be prepared in triplicate: the original and the duplicate copies shall be filed with the Bureau of Internal Revenue and the triplicate copy, duly stamped by the receiving officer shall be retained by the taxpayer as his/its file copy. Public officers shall, however, accomplish the statement in five copies and file two signed copies with the head of their office on or before September 30, 1974. Such copies of the statement shall serve as the statement of assets and liabilities required by Republic Act No. 3019 to be filed on or before January 31, 1974. In cases where husband and wife are both public officers but working in different offices they shall each furnish their respective department heads two signed copies of said statement. Subsequent statements to be filed pursuant to Republic Act No. 3019 shall be filed in the manner provided for in the aforesaid law. SECTION 4. Where to file . The statement of assets, liabilities and net worth required in these regulations shall be filed with the Commissioner of Internal Revenue, Revenue Director, Revenue District Officer or Collection Agent of the City or municipality or the City/Municipal Treasurer who has been designated as revenue collection officer of the municipality where the filer has his/its place of business or his/its legal residence. If there be no office or place of business in the Philippines or if there be no legal residence, the statement must be filed with the Commissioner of Internal Revenue in Manila. In the case of non-resident citizens, the statement must be filed with the Philippine Embassy or Consulate nearest their place or residence abroad or with the Commissioner of Internal Revenue in Manila. SECTION 5. Exemption from filing . The following are not required to file statement of assets, liabilities and net worth: (a) An individual, the total gross value of whose assets is less than Fifty Thousand Pesos, except public officers who are required to file the statement irrespective of the total value of their gross assets; (b) Diplomatic or consular representatives and officers of foreign governments; (c) Members of the Armed Forces of the US government in the active service who are stationed in the Philippines; and (d) Officials and officers, who are not citizens of the Philippines, of multi-national corporations or of agencies of the United Nations or foreign or international regional organizations established in the Philippines. SECTION 6. Contents of statement . (a) The statement shall include all the assets and liabilities of the person filing, whether within or without the Philippines and whether or not the assets are covered by the different Presidential Decrees on tax amnesty. However, where such person filing is a non-resident alien or a foreign corporation, whether resident or non-resident, the statement shall include only those assets and liabilities within the Philippines. (b) The assets shall include all properties, real or personal, tangible or intangible, and whether or not used in trade or business. (c) The liabilities shall comprise all known debts and obligations which are legitimate and enforceable, whether secure or unsecured and whether or not incurred in trade or business. (d) The statement shall likewise contain the Net Worth as hereinafter defined. SECTION 7. Valuation . (a) Assets . (1) Real Properties . In the case of real properties, the cost of acquisition and improvement shall be considered for the purpose of computing the gross assets and net worth. However, depreciable real properties used in business shall be valued at acquisition or construction cost less accumulated depreciation. The statement shall also include the value of such assets contained in the declaration filed under Presidential Decree No. 76. (2) Personal properties . In the case of personal properties the amount to be declared shall be the cost of acquisition. However, if the property is used in trade or business, it shall be valued at acquisition cost less accumulated depreciation. (3) Properties acquired by gratuitous title . In the case of property, whether real or personal, acquired by gratuitous title, the cost shall be the value on which the transfer taxes due on the transmission of such property were finally determined by the Bureau of Internal Revenue; however, if no such determination was made, the fair market value of the property at the time of its acquisition shall be deemed to be the cost thereof. (b) Liabilities . Only legitimate and enforceable obligations reducible in sums of money shall be included in the statement. SECTION 8. Treatment of Statement . The statement required under these regulations shall be confidential in nature. No information in the statement shall be published except in the form of tabulations and summaries having no reference to the person filing. SECTION 9. Definitions . As herein used, the following terms are defined as follows: (a) "Person" means an individual, trust, estate, corporation or a duly registered general partnership, more specifically detailed as follows: (1) Citizens of the Philippines whether residing here or abroad; (2) Resident aliens; (3) Non-resident aliens, whether or not engaged in trade or business in the Philippines, with respect to properties of whatever kind and nature situated in the Philippines; (4) Domestic corporations no matter how created or organized and for whatever purposes, as defined in Section 84 of the Tax Code, and include unregistered partnerships, joint stock companies, joint accounts (cuentas en participation) associations or insurance companies; (5) Resident foreign corporations; (6) Non-resident foreign corporations engaged in trade or business in the Philippines or non-resident foreign corporations having properties of whatever kind or nature situated in the Philippines; (7) General professional partnerships and duly registered general co-partnerships; and (8) Estates and trusts. (b) "Public officers" include all elective and appointive officials and employees of the government or any of its agencies and instrumentalities, including government-owned or controlled corporations, irrespective of the nature of their position, whether permanent or temporary, classified or unclassified, or exempt service. (c) "Gross assets" shall comprise all properties, real or personal, tangible or intangible, and whether used in business or not. (d) "Fair market value" means the price at which property will change hands between a seller who is willing to sell and a buyer who is willing to buy both under no obligation to sell or to buy. (e) "Liabilities" comprise all known debts and obligations which are legitimate and enforceable, whether secured or unsecured, and whether incurred or not in trade or business. (f) "Net Worth" is the difference between total assets and total liabilities. SECTION 10. Penal Provisions . (a) Any officer or employee of the Bureau of Internal Revenue or any government entity having knowledge of the declaration of assets, liabilities and net worth required in these regulations who shall disclose the same to any unauthorized person shall be subject to a fine in the amount of not less than Five Thousand Pesos or imprisonment for not less than two years, or both, and shall be summarily dismissed from the service for cause. (b) Any person required to file the statement under this decree who knowingly makes a false declaration or who deliberately fails to comply with any of the provisions hereof, shall upon conviction, pay a fine or not less than Five Thousand Pesos and imprisonment of not less than two years. If the offense is committed by 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 less than Five Thousand Pesos and imprisonment of not less than two years. SECTION 11. Effectivity . These regulations shall take effect immediately. cdt CESAR VIRATA Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5