The Bookkeeping Regulations

March 17, 1947 REVENUE REGULATIONS NO. V-1 THE BOOKKEEPING REGULATIONS TO : All Internal Revenue Officers and Others Concerned CHAPTER I Scope and Definition of Terms SECTION 1. Scope. Pursuant to the authority granted in section 4 (j), of Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code, the following regulations relative to the keeping of books of accounts, records, registers, and the issuance of invoices, receipts, tickets, and other supporting papers and documents by persons subject to internal revenue taxes, and the manner of recording business transactions are hereby promulgated and shall be known as Revenue Regulations No. V-1 or "The Bookkeeping Regulations". ScHADI SECTION 2. Definition of Terms. As used in these regulations, the following words and phrases shall be taken to mean as follows: "Persons" includes natural persons and partnerships, associations, companies or corporations, no matter how created or organized. "Books of accounts" shall include the journal and the ledger and their subsidiaries, or their equivalents. "Journal" is a book of original entry in which the happenings or transactions affecting the business of a taxpayer are recorded consecutively day by day as they occur. "Ledger" is a book of final entry to which are posted the classified accounts or items of all transactions entered in the journal or its equivalents. CHAPTER II Books of Accounts and Internal Revenue Books "All corporations, companies, partnerships, or persons required by law to pay internal revenue taxes shall keep a journal and a ledger, or their equivalents; Provided, however, that those whose gross quarterly sales, earnings, receipts, or output do not exceed P5,000 shall, at their option, be exempt from the requirements of keeping the books above mentioned, but unless they do keep the same, they must keep the internal-revenue sales and purchase books and other records prescribed by the Bureau of Internal Revenue and any other additional data that the Secretary of Finance may require by rules and regulations and which may be necessary for the accurate determination of the amount of taxes due the Government." (Sec. 334, Commonwealth Act No. 466.) TADaCH SECTION 3. Persons Required to Keep Books of Accounts. Persons required by law to pay internal revenue taxes whose gross quarterly sales, earnings, receipts, or output, whether subject to percentage tax or not, exceed five thousand pesos (P5,000), are required to keep books of accounts in accordance with the standard accounting system. The said books of accounts shall consist of a journal and a ledger, or their equivalents, and shall contain all information necessary for the accurate determination of the internal revenue taxes on their businesses. SECTION 4. Journals, Ledgers, and Their Equivalents. The journal may consist of only one book, the general journal. Its equivalents may consist of several books such as sales book, purchase book, cash book and such other books as the taxpayer may find convenient for his business. Such books are also books of original entries where all the daily transactions, whether cash or otherwise, are recorded in their chronological order. A journal, in order to comply with the provisions of these regulations, must contain all the transactions affecting the business. Every entry in the general journal shall carry a brief but complete explanation of the nature of the business transaction and be supported by proper vouchers. The general journal shall be in bound form. Where subsidiary journals are used, the same may be either bound or in loose-leaf form, provided that the entries in loose-leaf sheets shall be summarized at the end of every month in the general journal which shall then be posted to the ledger. The ledger, like the journal, may consist of one book, the general ledger. Its equivalents may consist of several ledgers, such as customers' ledger, creditors ledger, stock ledger, and such other books as the taxpayer may find convenient for his business. All entries in the journal must be posted to the ledger not later than seven days from the date of the transaction, and shall be classified in the ledger so as to show the assets, liabilities, capital, and the operating accounts from which a balance sheet, and a profit and loss statement covering the operation of the business can be prepared. No entry shall be made in the ledger or its equivalents unless said entry originates from the journal or its equivalents. The general ledger shall be in bound form. Where subsidiary ledgers are used, the same may be either in book form or in loose-leaf form, provided that the entries in the loose-leaf subsidiary ledger are reflected in the general ledger by a controlling account. In meritorious cases and upon written authority of the Collector of Internal Revenue the use of the general journal and the general ledger in loose-leaf form may be allowed. SECTION 5. Internal-revenue Books, When Required. Persons required by law to pay internal revenue taxes on business whose gross quarterly, sales, earnings, receipts or output do not exceed five thousand pesos (P5,000) may, at their option, keep the regular books of accounts; otherwise, they shall keep the internal-revenue purchase and sales or receipts book and expense book. SECTION 6. Transactions to be Recorded in Internal-revenue Books. Every sale or receipt amounting to P50 or more and the aggregate amount of the daily sales or receipts that are less than P50 each shall be recorded every day in the internal-revenue sales book or the internal revenue book of receipts. Transactions in cash or on credit shall be entered separately in the sales book or in the book of receipts not later than five o'clock in the afternoon of the day following the date on which the transactions were affected. If there are no sales or receipts during any day, that fact shall be noted in the book within the same period. All purchases and expenditures shall be recorded every day in the internal-revenue purchase and expense book showing in detail the quantity and description of the articles purchased, the services rendered, or the expenses incurred, the name and address of the vendor, lessor of the service, or person receiving payment, and the date and the amount of the transaction. Any cash transaction, as well as any transaction on credit, shall be recorded separately in this book not later than five o'clock in the afternoon of the day following the date the particular transaction was effected. The books prescribed in this section shall conform substantially with Forms "A", "A-1", and "B" of the Appendix. (Pages 25-27 hereof.) EHaCID SECTION 7. Records of Receipts and Disbursements. All persons subject to any internal-revenue tax on their occupation, pursuit or calling of whatever nature, or on their income, such as professionals, farmers, property owners, etc., shall, unless they provide themselves with the journal and the ledger or their equivalents, keep a record of their receipts and disbursements. All entries therein shall be made not later than five o'clock in the afternoon of the day following the date the transaction was effected. However, a person whose only source of income is his salary shall be exempt from keeping the records prescribed in these regulations. SECTION 8. Entries to be Kept up to Date in Ink or Indelible Pencil. All entries in the books of accounts and other records must be kept up to date in ink or indelible pencil in a neat and legible manner, and the figures entered in all columns shall be totalled within twenty-four hours from and after the close of each calendar month and the totals posted at the foot of the respective columns. All transactions, the time of posting or entry of which is not specifically provided for in these regulations, shall be recorded within seven days from the date the transactions were effected. CHAPTER III Other Books and Records "All corporations, companies, partnerships, or persons keeping the books of accounts mentioned in the preceding section may, at their option, keep such subsidiary books as the needs of their business may require: Provided, That where such subsidiaries are kept, they shall form part of the accounting system of the taxpayer and shall be subject to the same rules and regulations as to their keeping, translation, production, and inspection as are applicable to the journal and the ledger." (Section 335, Commonwealth Act No. 466.) SECTION 9. Subsidiary Books. Persons required to keep the books and records mentioned in section 334 of the National Internal Revenue Code may, at their option, keep such subsidiary books as the needs of their business may require and such other books as may be required by these regulations. Such books shall be subject to the same rules and regulations as are applicable to the journal and ledger prescribed in Chapter II hereof. SECTION 10. Records to be Kept by Proprietors or Operators of Rope Factories, Sugar Centrals, and Desiccated Coconut Factories. Aside from the books and other records required in Chapter II of these regulations, proprietors or operators of rope factories, sugar centrals, desiccated coconut factories and other factories subject to the percentage tax on the gross value of their output or gross sales of their products shall keep true and correct records of their purchases of raw materials, the finished products and by-products. The record of purchases of raw materials shall indicate the kind and quantity of raw materials received, the unit price, and the total value of the said raw materials, the date of receipt, the number of receipt issued therefor, and the name, address and residence certificate of the persons from whom the raw materials were purchased. The record of finished products and by-products shall state the date of production, and the kind and quantity of the finished products and by-products, and the record of removals shall show the date of removal, the number of the invoice issued therefor, the kind and quantity of the finished products or by-products, the unit price and the total selling price or market value thereof, and the name, address and residence certificate of the purchaser or the person to whom delivery is made. TCDHIc The proprietor or operator of a factory or mill may adopt such system of keeping his records as may be convenient for his business, provided that the system adopted truly reflects all his transactions and his books contain all the desired information. All his purchases shall be covered by the corresponding receipts, except when the person from whom the same are made has issued invoices therefor in which case, the proprietor or operator may keep the said invoices in lieu of issuing receipts therefor, provided that said invoices show the information herein required. Every removal of the finished products or by-products shall be covered by an invoice, showing the date of removal, the kind and quantity of the finished product or by-product removed, the unit price and the total selling price or market value thereof, and the name, address, and residence certificate of the purchaser or the person to whom delivery is made. Proprietors or owners of rice mills and corn mills shall keep the records an issue the receipts and invoices prescribed in Revenue Regulations No. 7 (Rice and Corn Mills Regulations). SECTION 11. Record of Jobs Received by Contractors. Road, building, waterworks, and other construction work contractors and other persons subject to tax under section 191 of the National Internal Revenue Code shall, in addition to the books and other records required in Chapter II of these regulations, keep a register book for job orders received in which they shall enter immediately upon making a contract the date, name and address of the customer, a description of the articles to be constructed or the services desired, the consideration therefor, and the amount of deposit or partial payment, if any; and upon completion and delivery of the subject matter of the contract, the date of completion or delivery and the amount paid therefor. Keepers of hotels and lodging houses may, in lieu of the records of jobs received, keep a guest register book in which shall be entered immediately upon accepting a guest the date and time of his arrival, the name and address of the guest, and the number of the room to be occupied; and, upon checking out, the date and time of his departure, and the amount paid by him. The entries shall be numbered consecutively for purposes of reference. The books prescribed herein shall conform substantially with Form "C" of the Appendix. (Page 28 hereof.) In case any of the taxpayers enumerated in section 191 of the National Internal Revenue Code finds the use of the register book for jobs received impracticable for his business, he may devise such system of keeping his books and other records as may be appropriate for his particular business and submit said books and records for approval to the Collector of Internal Revenue if his place of business is in Manila, or to the provincial revenue agent, if in the province. No such books and records may be used until they are duly approved in accordance with section 19 of these regulations. SECTION 12. Records to be Kept by Brokers. Aside from the books and other records required in Chapter II of these regulations, stockbrokers, dealers in securities, real estate brokers, real estate dealers, commercial, customs and immigration brokers shall use serially numbered contract forms, which shall be issued in chronological order, for each agreement had with their customers, showing the date and other facts concerning the services rendered or to be rendered and the signature of the parties thereto. The contracts shall be recorded every day in a register book showing the date and number of the contract, the name of the customer, the services desired, the subject matter and the value thereof (in case of properties), the compensation agreed upon and the duration of the contract; and upon termination of the contract, a remark as to the date and number of the receipt issued for the compensation received. The contracts shall be filed in the office of the broker in numerical order together with copies of all papers concerning the transactions. In case of commercial brokers representing foreign companies, copies of the orders such as cablegrams, telegrams, radiograms, etc., shall be filed with the corresponding file copies of the contracts. These pertinent papers need not be filed with the file copies of the contracts where a filing system is employed such that said papers are readily available by reference appearing on the file copies of the contracts. DTSaIc SECTION 13. Record of Inventories. Persons required by law to pay internal-revenue taxes on business shall keep, in addition to the other books and records prescribed in these regulations, a book of inventories, in which they shall record in detail the quantity, description, unit cost, and total cost of every item of their stocks-in-trade, materials, supplies and all other goods found in the premises of their establishments at the time they start business and at the close of the calendar year or accounting period. The inventory at the beginning shall be made and submitted to the Collector of Internal Revenue, if the place of business is in Manila, or to the deputy provincial or city treasurer, if in a municipality or city, within ten days after securing the privilege tax-receipt or starting the business, and the subsequent inventories not later than thirty days after the close of the calendar year or accounting period. This period may, in meritorious cases, be extended by the Collector of Internal Revenue. Deputy provincial and city treasurers shall, upon receipt of such inventories, immediately send the same to the corresponding provincial revenue agent who shall keep and preserve them for purposes of reference. CHAPTER IV Invoices or Receipts "All persons subject to percentage tax shall, for each sale or transfer of merchandise or for services rendered valued at two pesos or more prepare and issue sales or commercial invoices or receipts serially numbered in duplicate, showing, among other things, their names, or styles, if any, and business address: Provided, That in case of sales, receipts or transfers in the amount of fifty pesos or more the invoices shall further show the name or style, if any, and business address of the purchaser. The original of each sales invoice or receipt shall be issued to the purchaser or customer who, if engaged in any taxable business, shall keep and preserve the same in his place of business for a period of five years from the date of the invoice, the duplicate to be kept and preserved by the person subject to percentage tax, also in his place of business for a like period: Provided, That persons subject to percentage tax whose gross sales or receipts during the last preceding year exceed twenty thousand pesos shall, for each sale or transaction, issue an invoice, irrespective of the value of the articles sold or service rendered. "The Collector of Internal Revenue may, in meritorious cases, exempt any person subject to percentage tax from compliance with the provisions of this section." (Section 204, Commonwealth Act No. 466, as amended by Commonwealth Act No. 526 and section 9, Republic Act No. 48.) SECTION 14. Vouchers for Transaction. Persons paying internal revenue taxes who are required to keep the books of accounts mentioned in section 334 of the National Internal Revenue Code shall have a voucher for each entry in their books. The voucher may be an invoice, receipt, check or other document, which shall show the details of each transaction. Persons subject to the percentage tax shall issue a sales or commercial invoice for each sale or transfer of merchandise or for services rendered valued at P2 or more. In case the transaction is valued at less than P2, the taxpayer need not issue any invoice, but unless it is issued, the transaction must be recorded immediately after it is effected in a record of petty sales or transactions the entries in which shall be summarized at the end of the day and the total transferred to the journal or internal-revenue sales book or book of receipts. If the gross sales or receipts of a person during the preceding year exceed P20,000, every sale or transaction effected by him shall be covered by an invoice, irrespective of the amount of the sale or transaction. Persons paying internal-revenue taxes other than the percentage tax shall issue an invoice or receipt for any amount of money received by them in connection with their business. However, in case the amount received is less than P2, no invoice or receipt need be issued, but unless it is issued, the amount must be recorded immediately upon receipt thereof in a record of petty sales or receipts, the entries in which shall be summarized at the end of the day and the total transferred to the journal or internal-revenue sales or receipts book. The record of petty sales or receipts may be dispensed with if a cash register machine with roll sheets is used to record all petty transactions. The entries in the roll sheets shall be summarized at the end of the day and the total transferred to the journal or to the internal-revenue sales or receipts book. The said roll sheets shall be identified by the signature or initials of the taxpayer or his bookkeeper or manager and shall show the dates of the transactions therein recorded. cAHITS Every purchase or expenditure by a taxpayer subject to these regulations shall also be supported by an invoice or a receipt issued by the vendor or the person rendering the service. In case an invoice or a receipt is not issued, the taxpayer concerned shall require the vendor to sign a purchase or expense voucher showing the date, the quantity and description of the articles purchased or the services rendered, the consideration paid therefor, and the name and address of the vendor or lessor together with the number, date and place of issue of his residence certificate. The Collector of Internal Revenue may, in meritorious cases, exempt a person from compliance with these regulations. SECTION 15. Form and Manner of Issuance of Invoices and Receipts. An invoice or a receipt, in order to comply with the requirements of these regulations, must be serially numbered and made at least in duplicate. They shall be bound in the form of booklets or pads of 50 or 100 each, and shall show, among other things, the name and address and the business style, if any, of the person issuing the same, and shall contain such columns as may be necessary and appropriate for the business of the taxpayer concerned. The invoices or receipts may have as many duplicate copies as may be necessary for the purposes of the taxpayer, but the duplicate copies shall bear the same serial number as the original. Where the transaction is required to be covered by an invoice or receipt, the same shall be issued at the time the transaction is effected and the original thereof delivered to the purchaser or to the person from whom payment is received. In the case of sales invoices, they shall show the date of the transaction, the quantity and description of the merchandise, the unit cost, and the total price. In case of a sale or transfer in the amount of P50 or more, the invoice shall also show the name or style, if any, the business address of the purchaser, and the number, date, and place of issue of his residence certificate. In the case of other invoices, they shall show the date, the description of the articles or the nature of the service, the consideration paid therefor, and the name, address, and residence certificate of the person furnishing the articles or rendering the service. The residence certificate need not appear in the invoice when the other party to the transaction is a corporation or a registered partnership or association. SECTION 16. Freight Stub Receipts and Passage Tickets Required of Common Carriers. Common carriers, transportation contractors, and other persons subject to tax under section 192 of the National Internal Revenue Code shall use freight stub receipts and passage tickets in duplicate to be printed in accordance with such form as the Public Service Commission may, from time to time, prescribe. In issuing the freight stub receipt, the carrier or his agent shall enter in both the original and the duplicate the name and address of the carrier, the date of issue, the names and addresses of the shipper and the consignee, a description of the goods shipped with a statement of their weight or quantity, the place of delivery to the carrier and the destination of the goods, the route to be followed, the date of shipment, and the amount of freightage. Every receipt issued must be signed by the carrier or his authorized agent. Passage tickets shall also be in duplicate and must show the points of embarkation and destination and the amount of charges. The original must be delivered to the passenger or the shipper, and the duplicate retained by the carrier for record purposes and preserved for a period of five years from the date of issue. However, passage tickets may not be issued in duplicate if common carriers employ the services of inspectors or car auditors, etc. to check and supervise the issuance of the passage tickets by their conductors and if they keep in their office daily record of the number of tickets issued to every conductor as well as the number of tickets returned by each conductor after each trip or day's work. SECTION 17. Admission Tickets and Other Records to be Issued or Kept by Person Subject to Amusement Tax. In the case of amusement or business places where fees or cover charges are required to be paid for admission, the proprietor, lessee or operator shall evidence payment of fees or cover charges. The tickets shall be serially numbered and shall indicate the name of the place of amusement or business and the fees or cover charges. The serial number of each ticket and the admission fee or cover charge shall be printed on the ticket twice such that when the ticket is divided into two upon being presented for admission, both the serial number and the price shall appear on both parts. Before the proprietor, lessee or operator of the place of amusement or business orders tickets for printing he shall first send to the Collector of Internal Revenue, if the business is located in Manila, or to the provincial revenue agent or deputy provincial or city treasurer, if in the province, a written notice stating the name and address of the printer with whom he intends to place the order, the classes of tickets, the inclusive serial numbers, the admission fee or cover charge, and the total number of each class of tickets. The proprietor, lessee or operator shall keep for record purposes the invoice or receipt issued by the printer covering the order. DTAcIa Before being used, the tickets shall first be presented to the Collector of Internal Revenue, if the place of amusement or business is located in Manila, or to the provincial revenue agent or deputy provincial or city treasurer, if in the province, for approval and registration. The said officers shall keep a register of tickets in the form of a ledger, such that each place of amusement or business shall have a separate account or record for the purpose of entering therein all the tickets presented for approval and registration, indicating the date of registration, the classes of tickets, and the admission prices, the inclusive serial numbers, and the number of tickets of each class. The proprietor, lessee or operator of the place of amusement or business shall likewise keep a true and correct record of his stock of tickets, indicating the total number of registered and unregistered tickets, and of the registered tickets, how much has been sold from day to day. All such proprietors, lessees or operators shall prepare monthly statements of the daily box receipts from admission fees or cover charges, showing the total number of each particular class of tickets sold, the unit price of each class and the total amount collected, duly signed by the proprietor, lessee, or operator, or by his manager. The said statements shall be submitted to the Collector of Internal Revenue, if the place of amusement or business is in Manila, or to the deputy provincial or city treasurer, if in the province, not later than the 10th day of each month as regards the gross receipts for the preceding month. Duplicate copies of the said statements shall be kept by the proprietor or operator at the box office as part of his accounting system and the same shall be preserved in the same manner as the books of accounts and other records. Other persons subject to tax under section 260 of the National Internal Revenue Code shall keep true and correct records of their gross receipts. In case any of the records and registers hereinbefore mentioned are not appropriate for their business, they shall devise a system for recording their receipts appropriate for their business and submit the same, before they are used, to the Collector of Internal Revenue, if the place of business or amusement is in Manila, or to the provincial revenue agent or city or deputy provincial treasurer, if in the province, for registration and approval. CHAPTER V General Administrative Provisions "All such corporations, companies, partnerships, or persons shall keep the books or records mentioned in section 334 hereof in a native language, English, or Spanish; Provided, however, That if in addition to the said books or records the taxpayer keeps other books or records in a language other than a native language, English, or Spanish, he shall make a true and complete translation of all the entries in such other books or records into a native language, English, or Spanish, and the said translation must be made by the bookkeeper of such taxpayer or, in his absence, by his manager, and must be certified to under oath as to its correctness by the said bookkeeper or manager, and shall form an integral part of the books of accounts aforesaid." (Section 336, Commonwealth Act No. 466, as amended by section 12, Republic Act No. 48.) "All the books of accounts, including the subsidiary books, and other accounting records, of such corporations, companies, partnerships, or persons shall be preserved by them for a period of at least five years from the date of the last entry in each book and shall be subject to examination and inspection at any time by internal-revenue officers: Provided, That all corporations, companies, partnerships or persons, who retire from business shall, within ten days from the date of such retirement or within such period of time as may be allowed by the Collector of Internal Revenue in special cases, submit their books of accounts, including the subsidiary books, and other accounting records, to the Collector of Internal Revenue or any of his deputies for examination, after which they shall be returned." (Section 337, Commonwealth Act No. 466.) SECTION 18. Language to be Used in Keeping Books of Accounts and Supporting Papers; Translation of Entries in Other Books and Records. The books and records prescribed in section 334 of the National Internal Revenue Code shall be kept in a native language, English, or Spanish. The vouchers and other supporting papers and documents, being part of the accounting system, shall likewise be kept in a native language, English, or Spanish. However, persons who keep other books in addition to the books and records prescribed in section 334 of the Tax Code in a language other than a native language, English, or Spanish, shall, within ten days from the date of the transaction, make a true and complete translation thereof into a native language, English, or Spanish, the said translation to form an integral part of such books, registers and records. The translation shall be made in a neat and legible manner in ink or indelible pencil, either on the same page of the books, registers or records, opposite or below each entry or on a separate page opposite the page to be translated. The taxpayer, or his bookkeeper or manager, shall certify to the correctness of the translation of the entries in the book, register, or record by executing, within ten days after each book has been filled or its use completed, a certificate to be sworn to before a notary public or an internal-revenue officer authorized to administer oaths. The certificate shall be placed immediately following the translation of the last entry on the last page of each book and shall be substantially in the following form: "CERTIFICATE OF CORRECTNESS "I hereby certify that the foregoing translation is a true and complete translation of all the entries contained in this __________________________ covering the period _______________________ to ______________________, 194___. _________________________ (Owner, Bookkeeper, or Manager) "Subscribed and sworn to before me at _________________, Philippines, on this _____ day of ______________, 194___. _________________________ Internal Revenue Agent or Notary Public." SECTION 19. Prior Approval and Registration of Books of Accounts, Registers, Records, Invoices and Receipts. Persons required to keep books of accounts, internal-revenue books, records of receipts and disbursements, additional registers and other records, invoices, and receipts for recording their transactions as prescribed in these regulations shall, before using any of the aforesaid books, records, registers, invoices, or receipts, first present them to the Collector of Internal Revenue, if the place of business is in Manila, or to the provincial revenue agent or to the deputy provincial or city treasurer, if in the province, for approval and registration. A register book for every book, register, or record which has been approved shall be kept showing such information as the date of approval; the name and address of the taxpayer; his citizenship; the number of the alien registration certificate or landing certificate, if an alien; the kind of business and the schedule, paragraph and number of the privilege tax-receipt issued for the business if any; and the kind, volume, number of pages or sheets of the book, register or record approved. Every book, register, or record so approved and registered shall be serially numbered for each taxpayer. cEaACD Likewise, all approved invoices and receipts shall be recorded in a register showing such data as the date of approval; the name, address, and the kind of business of the taxpayer; the schedule, paragraph, and number of his privilege tax-receipt; and the number of booklets or pads and the inclusive serial numbers of the invoices or receipts thus approved. Before ordering invoices or receipts for printing, a taxpayer shall send to the Collector of Internal Revenue, if his place of business is in Manila, or to the provincial revenue agent or city or deputy provincial treasurer, if in the province, a written notice of the name and address of the printer with whom he intends to place the order, and the total number and the inclusive serial numbers of the invoices or receipts ordered. Before any book, register, or record is presented for registration, there shall be placed on the front cover by the owner thereof an identification as to the kind of book, register, or record, the name and business address of the owner, citizenship, the number of the alien registration certificate or landing certificate, if an alien, the kind of business engaged in, and the schedule, paragraph, and number of the privilege tax-receipt issued for the business, if any. The pages of the book, register or record must be serially numbered in a permanent and legible manner. If a book, register, or record is approved, the following authentication shall be made by the approving officer on the reverse side of the front cover thereof: "This __________________, Volume No. ________ with ________ pages or sheets, is approved on this _______ day of _____________, 194____, for purposes of Revenue Regulations No. _______. ____________________ (Signature) ____________________ (Designation of Officer)" If the book, register, or record presented for approval is a continuation of previous books, registers, or records, besides the foregoing authentication, the following notation shall be added to the authentication: "Volume No. _______ of this ___________ was approved on the _______ day of _____________, 194____. ____________________ (Signature) ____________________ (Designation of Officer)" In the case of invoices and receipts, the approval shall be indicated by an appropriate stamp placed on the front cover and on the back page of the last invoice or receipt of the booklet or pad approved, together with the signature of the officer authorized to approve the same. SECTION 20. Inspection of Books, Registers and Records. All books, registers and other records, and vouchers and other records, and vouchers and other supporting papers required by these regulations shall be kept at all times at the place of business of the taxpayer, subject to inspection of any internal-revenue officer, and upon demand, the same must be immediately produced and submitted for inspection. When required by inspecting officers, the owner, bookkeeper, or manager shall give the necessary explanations regarding the items in the entries contained in the said books, registers and records. In the case of a branch store, or where the controlling books are kept in a place other than the business establishment, there shall be kept in the store or business establishment such books and records as would clearly reflect all the transactions effected therein. When the books, register, record and other papers are needed by an internal-revenue officer for examination outside of the taxpayer's place of business, the said officer shall issue a receipt therefor on the required internal revenue form. After making the inspection or examination of the said books, registers, records and papers, the internal-revenue officer shall make a certificate or notation on the inner side of either cover of the book examined, stating thereon the extent of his examination and his findings. SECTION 21. Preservation of Books of Accounts and Other Records. All the books, registers, records, vouchers, and other supporting papers and documents prescribed in these regulations, and other records kept by taxpayers at their option, shall be preserved intact, unaltered, and unmutilated for at least five years from the date of the last entry in each book or from the date of the last transaction, and the same shall be kept at all times in the place of business of the taxpayer, who shall produce them for examination or deliver the same or any of them for inspection outside of his place of business upon demand of any internal-revenue officer. SECTION 22. Submission of Books and Records Upon Retirement. All taxpayers required by these regulations to keep books of accounts or other records who retire from business or cease to pursue their calling shall, within ten (10) days from the date of such retirement, or within such period of time as may be allowed by the Collector of Internal Revenue in special cases upon application therefor in writing, submit their books of accounts and other records pertaining to their business, including the translations thereof, to the city treasurer or the deputy provincial treasurer for examination. The city treasurer or the deputy provincial treasurer shall keep all such books and records in a secure place and notify the corresponding provincial revenue agent of the receipt thereof within forty-eight hours after the receipt of such books and other records. An examination of such books of accounts and records shall be conducted immediately by an internal-revenue officer to ascertain if all the taxes due from the taxpayer have been paid. cACDaH SECTION 23. Return of Books and Records. The books of accounts and other records mentioned in the preceding section shall not be returned until after the taxes, charges and penalties found to be due, if any, shall have been paid, unless authority to do so shall have been first secured from the Collector of Internal Revenue. Furthermore, in case a violation of any provision of the internal revenue laws or regulations has been committed by a taxpayer and said books of accounts and records constitute the evidence of such violation, they shall not be returned until after the case shall have been finally settled. After the books of accounts and records have served the purpose for which they were taken or submitted, the Collector of Internal Revenue shall notify the taxpayer or his representative to get the books and other records. If the books and other records are not taken by the taxpayer or by his representative the same shall be destroyed by the Collector of Internal Revenue within six months from the date of said notice. Books held by internal-revenue officers for examination in the provinces shall be destroyed by the provincial revenue agents only upon previous authority of the Collector of Internal Revenue. CHAPTER VI General Penal Provisions "A person who violates any provision of this Code or any regulation of the Department of Finance made in conformity with the same, for which delinquency no specific penalty is provided by law, shall be punished by a fine of not more than three hundred pesos or by imprisonment for not more than six months, or both." (Sec. 352, Commonwealth Act No. 466.) Any person who knowingly shall make a false entry or enter a false or fictitious name in the books or records mentioned in sections 334 and 335 of this Code, or who shall abet or aid in any manner in the making or writing thereof, shall be fined in a sum of not less than five hundred pesos nor more than five thousand pesos or imprisoned for a term of not less than six months and one day nor more than five years, or both. "Any person who fails to keep the books or records mentioned in section 334 in a native language, English, or Spanish, or to make a true and complete translation as required in section 336 of this Code, or whose books or records kept in a native language, English, or Spanish are found to be at material variance with books or records kept by him in another language, shall be fined in a sum of not less than two thousand pesos nor more than ten thousand pesos or imprisoned for a term of not less than two years nor more than six years, or both." (Sec. 355, Commonwealth Act No. 466, as amended by sec. 13, Republic Act No. 48.) SECTION 24. Penalty for Making False Entries or Writing False or Fictitious Names in Books or Records. Any person who knowingly makes any false entry or writes any false or fictitious name in his books of accounts or other records, or who abets or aids in the making or writing thereof, is punishable under section 355 of the National Internal Revenue Code by a fine of not less than P500 nor more than P5,000 or by imprisonment of not less than six months and one day nor more than five years, or both. In order to obviate the possibility of entering false or fictitious names in their books, taxpayers should require persons with whom they have transactions which should be entered in their books to exhibit their residence certificates, if subject thereto, and take note of their number and the date and place of issue. A person who fails to keep the books or records mentioned in section 334 of the National Internal Revenue Code in a native language, English, or Spanish, or to make a true and complete translation of books kept in other languages into a native language, English, or Spanish, or whose books or records kept in a native language, English, or Spanish are at material variance with books or records kept by him in another language, is liable to a fine of not less than P2,000 nor more than P10,000, or imprisonment for not less than two nor more than six years, or both. SECTION 25. Penalty for Violation of Other Provisions of These Regulations. Any person who shall violate any provision of these regulations for which violation the National Internal Revenue Code or any other law does not provide any specific penalty shall be penalized, under section 352 of the aforesaid Code, by a fine of not more than P300 or by imprisonment of not more than six months, or both. SECTION 26. Repealing Provisions. Regulations Nos. 34, 48, 58, 84, 91, 101, 105 and 108 of the Department of Finance and other regulations inconsistent herewith are hereby repealed. SECTION 27. Date of Effectivity. These regulations shall take effect upon their promulgation in the Official Gazette. MIGUEL CUADERNO, SR. Secretary of Finance Recommended by: BIBIANO L. MEER Collector of Internal Revenue APPENDIX I Sales Book Form A The total of the amounts under columns "Cash Sales"' and "Credit Sales" represent the volume of business while the remaining columns are intended to show the classification of the sales in accordance with the privilege tax receipt of the business and the rate of the percentage tax due on each particular line of business. The illustration form should be used in a store where original sales are made (C-14), locally purchased articles are sold (C-13), and tobacco products as well as vino are retailed. It will be noted that sales of vino and tobacco products are grouped together even if they are treated by law as two different lines of business for the reason that they are not subject to any percentage tax and that the fixed tax therefor are not graduated unlike the business of selling locally purchased articles. The other columns are self explanatory: date for the date of the transaction, name and address of customer for the customer in cases of credit sale or in transaction of P50 or more each, and invoice for the number of invoice issued for the transaction. APPENDIX II Cash Receipts Book Form A-1 Persons who are subject to pay the percentage tax on gross receipts may not keep the sales book but the receipt book as illustrated. Upon receipt of the contract, the transaction is entered in Contract Received Book and at the end of the day, the advances received are posted to the Cash Receipts Book (posting separately the transactions involving P50 or more each) under the column "Advances." All the other payments received during the day shall be posted under the column "Balance." The total of the columns "Advances" and "Balance" represent the taxable business of the concern. APPENDIX III Purchase and Expense Book Form B APPENDIX IV Guest Register Book Form C