Amending Section 243 of Revenue Regulations No. 2 (Income Tax Regulations), As Amended

December 9, 1977 REVENUE REGULATIONS NO. 17-77 SUBJECT : Amending Section 243 of Revenue Regulations No. 2, otherwise known as the Income Tax Regulations, as amended by Revenue Regulations Nos. 8-76, 1-77, 2-77 and 3-77 concerning filing of information returns on BIR Form 1701B TO : All Internal Revenue Officers and Others Concerned SECTION 1. Pursuant to the provisions of Section 326 of the National Internal Revenue Code of 1977, Section 243 of Regulations No. 2, otherwise known as the Income Tax Regulations, implementing Section 77 of the same Code, as amended by Revenue Regulations No. 8-76 dated November 26, 1976, Revenue Regulations No. 1-77 dated January 25, 1977, Revenue Regulations No. 2-77 dated February 25, 1977, and Revenue Regulations No. 3-77 dated March 11, 1977, is hereby further amended to read as follows: "Section 243. Information Return on Aggregate payments of P1,800 or more . All persons, including corporations, partnerships, and associations, making payment to another person of fixed or determinable income in an aggregate amount of P1,800 or more in a calendar year must render a return thereof to the Commissioner of Internal Revenue on or before the first day of March of the succeeding year. "The return shall be made on BIR Form 1701B. Such returns shall be accompanied by an alphabetical list, in duplicate, showing the recipient's (payee's) name, taxpayer account number, and current business address (if engaged in business or the practice of a profession) or residential address (if not so engaged), or at least the address of the payee appearing in the payor's record at the time of payment. "The information returns (BIR Form 1701B) together with the original AND DUPLICATE COPIES of the alphabetical list, shall be filed with the Revenue Regional Director, Revenue District Officer, or Collection Agent where the principal office or residence of the payor is located. An acknowledged copy of the alphabetical list shall be attached by the payor to the original copy of his income tax return for the year payments were made. "It shall be the responsibility of the payee-recipient to keep a record of all the fixed or determinable income received from the payors and to report the same in his income tax return. "Where the payor files its income tax return on a fiscal year basis, it shall attach the acknowledged copy of the alphabetical list for payments made during the preceding calendar year. "The names of all persons to whom annual payments of P1,800 or more were made, whether such total sum is made up of rents, royalties, annuities, interests, pensions, shares of profits, and dividends, salaries, wages, fees, commissions or compensation in any other form which were not subjected to withholding, and other fixed or determinable income, must be reported. Payments in kind, such as living quarters, meals, and lodging, stocks, other personal property, etc., are taxable income to the recipient and, as such, its money value should be included. "The information returns prescribed herein shall also be filed, regardless of the amount of interest paid upon bonds and mortgages or deeds of trust or other similar obligations of corporations. "In the case of payments of annual or periodical income to nonresident alien individuals or to foreign corporations or firms not engaged in trade or business within the Philippines and intercorporate dividends which were subjected to withholding, the return by the withholding agents shall constitute and be treated as return of information under Section 77 of the National Internal Revenue Code." SECTION 2. Effectivity . These regulations shall take effect on JANUARY 1, 1978 beginning with the information returns as to payments made in the year 1977 AND SUPERSEDES ALL OTHER REGULATIONS HEREIN-BEFORE ISSUED ON THE SAME SUBJECT MATTER. aisa dc CESAR VIRATA Secretary of Finance Recommended by: EFREN I. PLANA Acting Commissioner of Internal Revenue TAN P4519-F2828-A-8 ANNEX December 12, 1977 MEMORANDUM FOR: The Secretary of Finance 1. Attached is the proposed amended Section 243 of Revenue Regulations No. 2, implementing Section 77 of the Tax Code of 1977. 2. The proposed amendment moves the deadline for filing BIR Form No. 17.01B from January 31 to March 1 of succeeding year. The reason for the proposed amendment is that many taxpayers have numerous income payments during the year covered by the regulations and experience with the implementation of this requirement beginning 1976 indicates that many taxpayers could hardly comply with such requirements within the limited time prescribed therein. 3. It is therefore recommended that the attached proposed regulations be approved. Respectfully submitted, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8