Revised Regulations Governing the Issuance of Tax Clearance Certificates

November 17, 1952 REVENUE REGULATIONS NO. V-32 SUBJECT : Revised Regulations Governing the Issuance of Tax Clearance Certificates TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of section 338 in relation to section 4 of Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code, the following regulations which shall be known as "The Revised Regulations Governing the Issuance of Tax Clearance Certificates" are hereby promulgated for the information and guidance of all internal revenue officers, customs officials, common carriers by air and water, and others concerned governing the issuance of certificates of tax clearance. SEcAIC SECTION 1. Purpose and Scope. These regulations propose to establish a uniform procedure in the processing of applications for tax clearance certificates not only for travel abroad but also for purposes of the import control law and regulations, export control, naturalization, change of name, or requirement of any government bureau or office in conformity with existing laws, rulings, precedents and present practices and to designate the Government officials to be charged with the responsibility of processing tax clearance applications and issuing tax clearance certificates. SECTION 2. Certificate of Tax Clearance to be Secured by All Persons Leaving the Philippines. By mandate of section 343 of Commonwealth Act No. 466 no person shall leave the Philippines without a certificate of tax clearance to be issued by the Collector of Internal Revenue or his duly authorized representative. Any person contemplating to leave the Philippines must, therefore, apply for a tax clearance certificate on the application form prescribed by the Bureau of Internal Revenue. Upon receipts of the application by the Tax Clearance Section at the office of the Bureau of Internal Revenue, if in Manila, or at the office of a city or a provincial treasurer, if outside Manila, the same shall be serially numbered, recorded, and processed. The processing shall be done by a thorough checking of the liabilities of the applicant not only to the income tax but also to all taxes enforced and administered by the Bureau of Internal Revenue with the ample use of taxpayer's delinquency cards and other available records. In all cases where no previous tax clearance certificates have been issued to the applicant, the inquiry into his tax liability should embrace a period of five years prior to the date of application. However, as regards applicants who had previously been issued tax clearance certificates, the period of inquiry as to their tax liability should cover only the intervening period from the date they secured a tax clearance certificate and the date of their subsequent application. Persons departing from the Philippines prior to the last due date of filing an income tax return or any other tax return required by law must file the corresponding return and pay any tax shown by such return to be due before a tax clearance certificate is issued, unless such persons are represented by attorneys-in-fact who assume the obligation of filing the return and paying the tax thereon when due and payable. In the event that an applicant is unable to pay in cash his tax obligation but is returning to the Philippines at some future date, he may be allowed to file a surety bond guaranteeing the payment in full of his obligation. A surety bond in lieu of cash for the payment of a tax obligation should not be accepted from visitors, transients, tourists or non-resident aliens and no tax clearance certificate should be issued unless they have fully paid their tax liabilities. SECTION 3. Persons Exempted from Tax Clearance Requirement. The requirement of a tax clearance certificate shall not apply to sovereigns of foreign governments and the members of their suites, whether personal or official, representatives of foreign governments bearing diplomatic passports, and consular agents and tourists not engaged in commerce in the Philippines. As regards tourists or transient visitors, they need not secure certificates of tax clearance nor execute an affidavit attesting to their exemption from internal revenue taxes upon their departure from this country if their stay in the Philippines does not exceed fifty-nine days. However, tourists who engaged in commerce or receive income during their stay in the Philippines should secure the certificate of tax clearance irrespective of the period of their stay in this country. In accordance with an understanding between the government of the Republic of the Philippines and the United States of America, all citizen-personnel of the United States government are required to procure certificates of tax clearance but such persons are exempted from the payment of the income and residence taxes, including the documentary stamp tax on tax clearance certificates, if no other income is received from Philippine sources. SECTION 4. Certificate of Tax Clearance. After an application for tax clearance certificate has been duly processed as required in section 2 hereof, a tax clearance certificate shall be issued on B.I.R. Form No. 17.14 for applicants desiring to leave the Philippines. The corresponding documentary stamps in accordance with the proviso in section 225 of Commonwealth Act No. 466, as amended by section 14 of Republic Act No. 40, shall be affixed thereto and cancelled, to wit: fifteen pesos on each certificate for a first class passenger; eight pesos for a second or tourist class passenger; and two pesos for a third class or steerage passenger. Documentary stamps at the above rates should be affixed to every certificate to correspond to the number of persons of ages one year or over embraced in the tax clearance certificate. A tax clearance certificate for travel abroad is good for thirty days from the date of issue but may be extended for another thirty days only upon previous application to and approval by the issuing officer. In the cases of import control, export control, naturalization, or change of name, the corresponding tax clearance certificate on the prescribed forms shall be issued. SDTcAH SECTION 5. Officials Authorized to Issue Tax Clearance Certificates. The Collector of Internal Revenue, or any official designated by him, is hereby invested with the exclusive authority to issue tax clearance certificates in Manila. Outside Manila, the city or the provincial treasurer of the city or province in which the applicant is temporarily residing or has his place of business is hereby also authorized to issue tax clearance certificates. A tax clearance certificate may be issued only after the application has been duly processed and the tax liability of the applicant determined and duly paid, or covered by a surety bond as the case may be. In the task of processing the application, city and provincial treasurers should also avail themselves of the services and records of provincial revenue agents or their subordinates before actually issuing the certificate. SECTION 6. Prohibition Against the Issuance of Passage Tickets. Section 344 of Commonwealth Act No. 466 provides that no person, corporation, company, or association engaged in the business of carrying passengers shall issue a passage ticket or carry any passenger from a place or port in the Philippines to a foreign place or port unless the tax clearance certificate required by law is duly presented. All common carriers by water or by air are enjoined to strictly comply with this provision of the Tax Code by refusing to issue any passage ticket to any person who fails to exhibit a tax clearance certificate as required by law. SECTION 7. Cooperation of Officials of the Bureau of Customs. For the proper enforcement of these regulations, the Commissioner of Customs and all Collectors of Customs in all ports of entry and in all international airports together with their respective employees are hereby enjoined to give the necessary assistance as they may be able to render within their respective jurisdiction in order that no person may be able to leave the Philippines unless he has duly complied with the requirements of these regulations. SECTION 8. Penalties. Under the provisions of section 352 of Commonwealth Act No. 466, any person who violates any provision of these regulations shall be punished by a fine of not more than three hundred pesos or by imprisonment for not more than six months, or both. SECTION 9. Effective Date. These regulations which supersede all precedents, rulings and regulations inconsistent herewith shall take effect upon their promulgation in the Official Gazette. (SGD.) AURELIO MONTINOLA Secretary of Finance RECOMMENDED BY: (SGD.) S. DAVID Collector of Internal Revenue