Presidential Decree No. 23 dated October 16, 1972 Proclaiming Tax Amnesty

October 20, 1972 REVENUE REGULATIONS NO. 08-72 SUBJECT : Presidential Decree No. 23 dated October 16, 1972 Proclaiming Tax Amnesty TO : All internal revenue officers and others concerned Pursuant to Paragraph 4 of Presidential Decree No. 23 dated October 16, 1972, proclaiming tax amnesty under certain conditions, the following regulations are hereby promulgated: SECTION 1. Scope . These Regulations shall cover all cases of voluntary disclosures by taxpayers, natural or juridical, of "previously untaxed income",as the term is defined in Section 2, hereof, whether earned or realized in the Philippines or elsewhere. SECTION 2. What is "previously untaxed income" . The term "previously untaxed income" means: (a) In the case of an individual, all gains, profits or income which he, knowingly or unknowingly, failed to declare for income tax purposes in any year prior to 1972. If such be incapable of exact determination then the total increase in his equity or net worth up to the calendar year ending December 31, 1971 which cannot be explained by the total amount of income reported in his previous income tax returns, after excluding therefrom all items of income not subject to income tax and acquisitions by gift or inheritance, shall be deemed to be his "previously untaxed income". (b) In the case of a juridical person, all taxable gains, profits or income which were, knowingly or unknowingly, excluded in the income tax returns filed by the said taxpayer in any calendar year prior to 1972 or in any fiscal year ending on any day prior to the effectivity of the Regulations. SECTION 3. Tax imposed . A tax of TEN PER CENTUM (10%) on such previously untaxed income shall be paid in lieu of the income tax imposed under Title II of the National Internal Revenue Code, as amended, subject to the conditions enumerated in Section 5, hereof. The payment of the tax imposed under this section shall relieve the taxpayer from all criminal, civil, administrative and/or any other liabilities provided for under the National Internal Revenue Code, the Revised Penal Code, the Anti-Graft and Corrupt Practices Act or any other law applicable thereto. The taxes collected herein shall accrue to the General Fund and an appropriate Tax Numeric Code under Revenue Memorandum Order No. 50-68, dated November 4, 1968, shall be assigned by the Commissioner of Internal Revenue for this purpose. SECTION 4. Who may not avail of the amnesty . All taxpayers, natural or juridical, against whom a notice of deficiency assessment has been issued by the Bureau of Internal Revenue prior to the effectivity of these Regulations may not avail of the immunity provided for in Presidential Decree No. 23. However, if the basis for such deficiency assessment is either the failure to file a return of income or the omission of an item or items of taxable income from a return already filed by the taxpayer, or the underdeclaration in the said income tax return of such item or items of taxable income, then such taxpayer may avail of the amnesty provisions of the said Presidential Decree. In such latter case the taxpayer must declare in the notice and return required under Section 6 of these Regulations as his "previously untaxed income" the whole amount of net income as computed in the notice of deficiency assessment hereinbefore referred to. SECTION 5. Conditions under which amnesty may be granted . The tax on previously untaxed income referred to in Section 3, hereof, shall be accepted under the following conditions: (a) Such previously untaxed income must have been earned or realized prior to 1972; (b) The taxpayer must file a notice and return with the Commissioner of Internal Revenue on or before March 31, 1973 showing such previously untaxed income; (c) If such previously untaxed income, or part thereof, consist of cash hoarded abroad, such cash must be repatriated and deposited with any bank in the Philippines or invested as entrepreneur capital, additional capital contribution or in new issues of capital stocks in any of the preferred areas of productive undertaking, to wit: 1. BOI registered enterprises; 2. NACIDA promoted industries; 3. BTTI sponsored tourist oriented projects; 4. Export oriented industries; 5. Banks: rural, private development, commercial; 6. Utilities: transport, communication, power; 7. Agricultural cooperatives; 8. Livestock and other agricultural development projects; or utilized in the purchase of new issues of the following instruments: 1. Government bonds; 2. Government securities other than treasury bills; 3. Government debentures; 4. Treasury notes. (d) Such investments must be made within six (6) months from the date of such disclosure. The entrepreneural capital, additional capital contribution, shares of capital stocks or government issues representing the investment are not to be disposed of, transferred, assigned or conveyed within a period of three (3) years from the date of said investment. This condition shall apply also if such previously untaxed income, or part thereof, consist of cash hoarded in private vaults or safe deposit boxes in the Philippines. SECTION 6. Notice and return required . (a) Where to file . The notice and return required under these Regulations (BIR Form No. 1745 for individuals and BIR Form No. 1746 for Partnerships and Corporations) shall be filed in duplicate with the Commissioner of Internal Revenue, regional or revenue district office. (b) When to file . The notice and return must be filed on or before March 31, 1973. No extension of time to file said notice and return shall be granted for any reason whatsoever. (c) What must be contained in the notice and return required . The notice and return must contain the following information: 1. The taxpayer's name and address; 2. The taxpayer's account number; 3. A disclosure of how much his previously untaxed income amounts to; and 4. If such previously untaxed income, or a part thereof, consist of hoarded cash, a statement of whether such cash is hoarded within the Philippines or abroad and the amount thereof. SECTION 7. Payment of the tax . The tax imposed herein must be paid at the time of the filing of the return but not later than March 31, 1973. If the tax due is in excess of P10,000.00 the taxpayer may pay in two (2) equal installments, the first installment to be paid at the time of the filing of the return but not later than March 31, 1973 and the second installment within three (3) months after the filing of the return, without notice, but not later than June 30, 1973. SECTION 8. Investment of hoarded cash required . Hoarded cash, as defined in Section 9, hereof, which forms part, or all, of the previously untaxed income must be deposited with any bank in the Philippines or invested in the manner and under the conditions prescribed in Section 5, hereof, within six (6) months from the time of the disclosure but not later than September 30, 1973 SECTION 9. What is hoarded cash . The term "hoarded cash" means cash in any domestic or foreign currency in the Philippines or abroad, whether kept in private vaults, safe deposit boxes or in foreign bank deposits. However, if the cash is hoarded in any foreign country such term shall include all cash and/or cash items such as traveller's cheques, bank money orders, bank drafts, certificates of time deposits, bank manager's checks, negotiable letters and the like. SECTION 10. Notice of bank deposit or investment required . In case the hoarded cash is deposited in any bank in the Philippines in compliance with these Regulations, the taxpayer shall be required to submit to the Commissioner of Internal Revenue within thirty (30) days after such deposit has been made a certificate of bank deposit covering the amount stated in his notice and return. If such hoarded cash is not deposited but is invested pursuant to these Regulations, such investment shall be reported to the Commissioner of Internal Revenue within thirty (30) days after such investment is made. The report of such investment must contain the following information: 1. Name and address of the taxpayer; 2. Taxpayer Account Number; 3. Kind of investment made; and 4. Amount of investment. SECTION 11. Penal Provisions . (a) Failure to comply with conditions . Failure to comply with any of the conditions and requirements set forth in these Regulations shall nullify the immunity provided for in Presidential Decree No. 23. (b) Failure to pay the tax on time . The amnesty under Presidential Decree No. 23 shall be granted only after the tax imposed herein shall have been paid. This means not only that the tax must be paid in full but also that such tax must be paid within the time prescribed under Section 7, hereof. Failure to pay the tax, or any installment thereof, on time shall nullify the taxpayer's right to claim the immunity granted by the said Presidential Decree. The Commissioner of Internal Revenue shall, in such cases of failure to comply with any condition or to pay the tax on time, compute the income tax in accordance with the income tax rates prevailing in 1971 on the whole amount of such previously untaxed income, as provided for in the National Internal Revenue Code, as amended, and apply the penal provisions of the said Code. SECTION 12. Disposition of the notices and returns . (a) After the tax shall have been paid by the taxpayer, all notices and returns filed pursuant to the provisions of these Regulations 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 notices and returns filed pursuant to these Regulations. (b) Notices and returns filed pursuant to these Regulations shall not be made available to any court or any government office or agency nor shall the contents thereof be divulged to any person as provided for in Section 347 of the National Internal Revenue Code, as amended. (c) Violation of any prohibition under this section shall be punishable under the said Section 347. SECTION 13. Effectivity clause . These Regulations shall take effect immediately. cdt CESAR VIRATA Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue