Prospective application of the increased rate of contractor's tax

May 14, 1985 REVENUE REGULATIONS NO. 07-85 SUBJECT : Prospective Application of the Increased Rate of Contractor's Tax TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 326 in relation to Section 205 o f the National Internal Revenue Code, as amended by PD 1959, these regulations are hereby promulgated to implement the prospective application of the increased rate of contractor's tax. SECTION 1 . Effectivity of increased rate of contractor's tax . The 4% tax on gross receipts derived by contractors imposed under Section 205 of the National Internal Revenue Code, as amended by PD 1959, shall be applied on gross receipts derived from contracts entered into or renegotiated on or after October 15, 1984. Gross receipts derived from contracts entered into or renegotiated prior to October 15, 1984 shall be subject to the 3% contractor's tax. cd i SECTION 2 . Auxiliary statement . It shall be the duty of the contractor whose gross receipts are subject to the 3% and 4% tax as provided for in Section 1 hereof to attach to his or its quarterly percentage tax return, BIR Form 2529BQ, an auxiliary statement (sample attached). The statement shall show the receipts taxable under the old and new rates of tax. (SGD.) CESAR E.A. VIRATA Minister of Finance Recommending Approval: (SGD.) RUBEN B. ANCHETA Acting Commissioner AUXILIARY STATEMENT _____Quarter, 19___ 1. Gross receipts from contracts entered into or renegotiated before October 15, 1984 P10,000.00 3% P300.00 2. Gross receipts from contracts entered into or renegotiated on or after October 15, 1984 P10,000.00 4% tax P400.00 TOTAL PERCENTAGE TAX DUE & PAYABLE P700.00 ___________________________ Signature over printed name of taxpayer or agent or authorized officer