Filing of Income Tax Returns and Payment of Income Taxes

June 30, 1961 REVENUE REGULATIONS NO. V-74 SUBJECT : Filing of Income Tax Returns and Payment of Income Taxes TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 338 in relation to Section 4 of Commonwealth Act No. 446, otherwise known as the National Internal Revenue Code, the following regulations concerning the enforcement of sections forty-five and fifty-one of the National Internal Revenue Code, as amended by Republic Act No. 2343 which introduced what is commonly known as the Pay-As-You-File system, is hereby promulgated and shall be known as Revenue Regulations No. V-74. SECTION 1. Purpose and Scope. These regulations propose to establish a uniform procedure in the filing of income tax returns and the payment of income taxes. SECTION 2. Where to File Returns. Sections 45(b) and 46(c) of the National Internal Revenue Code prescribe the rules for filing income tax returns. "(b) Where to file. The return shall be filed with the Collector of Internal Revenue, provincial revenue agent, or treasurer of the province, city, or municipality in which such person has his legal residence or principal place of business, or if there be no legal residence or place of business in the Philippines, then with the Collector of Internal Revenue in Manila." (Sec. 45) "(c) Where to file. The return shall be made to the Collector of Internal Revenue, provincial revenue agent or to the treasurer of the province, city or municipality in which is located the principal office of the corporation where its books of accounts and other data from which the return is prepared are kept, or in the case of a foreign corporation, to the Collector of Internal Revenue, provincial revenue agent, or to the treasurer of the province, city or municipality in which is located its principal place of business in the Philippines, or if it has no office of any kind or agency in the Philippines, then to the Collector of Internal Revenue in Manila. All such returns shall be received and transmitted forthwith by the officer receiving them to the Collector of Internal Revenue." (Sec. 46) Sec. 5 of Republic Act No. 2655, the law relieving local treasurers from collecting internal revenue taxes, also provides: Sec. 5. Any and all references in the National Internal Revenue Code to the provincial and city treasurers and their deputies, their functions and duties in connection with internal revenue shall from the approval of this Act be deemed to refer to the collection agents of the Bureau of Internal Revenue." ScHADI Considering the foregoing provisions and present requirement that the tax must be paid upon the filing of income tax returns (see Section 3 hereof), and in order to prevent confusion and to facilitate the processing of returns and the compilation of statistical information therefrom as well as the orderly accounting of payments which are now made in respective Regional Offices, the following rules are hereby made regarding the filing of income tax returns. (a) An individual shall file his income tax return with the collection agent of the city or municipality in which he legally resides. If he is engaged in business, he shall file the return in the city or municipality where the principal office of his business is located and where his books of accounts are kept. (b) A corporation or registered general co-partnership shall file its income tax return with the collection agent of the city or municipality where its principal office is located and where its books of accounts are kept. (c) If the individual, corporation or registered general co-partnership had no legal residence, office or agency of any kind in the Philippines, the return must be filed with the Collection Agent of Manila. (d) The Regional Office or Provincial Revenue Office located in a city or municipality may also receive the returns otherwise to be filed with the collection agent of said city or municipality. SECTION 3. Where to Pay. Section 51 (a) (1) of the Tax Code, as amended by Republic Act No. 2343, provides as follows: SEC. 51. Payment and assessment of income tax (a) Payment of tax. (1) In General. The total amount of tax imposed by this Title shall be paid at the same time the return is filed but not later than the fifteenth day of April following the close of the calendar year, or, if the return is made on the basis of a fiscal year, then not later than the fifteenth day of the fourth month following the close of the fiscal year. Such tax shall be paid by the person subject thereto, and in the case of a corporation, by the president, vice-president, or other responsible officer thereof: Provided: That if in any preceding year, the taxpayer was entitled to a refund of any amount thereof, if not yet refunded, it may be deducted from the amount of tax to be paid. "If the return is filed after the time prescribed by law (including cases in which an extension of time for filing the return has been granted under section forty-seven of this Code), there shall be paid at the time of such filing the tax or installment which would have been payable on or before such time if the return had been filed within the time prescribed by law, and the remaining installment shall be paid at the time at which, and in the amount in which, it would have been payable if the return had been so filed, subject to the payment of interest at twelve per centum per annum from the original due date." The amendment introduced by Section 8 of Republic Act No. 2343 innovated in the Philippines the Pay-As-You-File system in force for sometime now in the United States. In accordance therewith, and since payment of the income tax in a place other than where the return is filed complicates the accounting thereof, the following rules on payment are hereby issued: (a) The income tax must be paid at the time of filing the return and necessarily to the collection agent of the city or municipality specified in Section 2 hereof. ADaSET (b) If the tax is over P500.00 and will be paid by installments, the second installment shall be paid also to the collection agent where the corresponding return was filed and the first installment was paid. SECTION 4. Relief by Collection Officers. Before the formal relief of the city or municipal treasurer by the revenue collection officer, pursuant to Sections 5 and 8 of Republic Act No. 2655, the returns shall be filed with said city or municipal treasurer, but after such relief, the return shall be filed with the collection officers. SECTION 5. Proper Address in Return. Every individual including an estate or trust, shall state in his return his legal residence, or the address of the principal office of his business if engaged therein. In the case of a corporation or registered general co-partnership, the address of its principal office shall be stated in its return. SECTION 6. Penalty for Incorrect Address. Any person, including corporation and registered general co-partnership, who fails to state in his return his correct legal residence, or the address of the principal office of his business, shall be penalized by a fine of not exceeding P300.00, or imprisonment for not more than six (6) months, or both. SECTION 7. Collection Officers Not to Accept Outside Returns and Payments. No collection officer in a city or municipality shall accept a return or payment of income tax from a taxpayer whose legal residence, or principal office of business, is located in another city or municipality. SECTION 8. Applicability to Withholding Taxes. These rules shall apply also to withholding taxes, including those withheld on wages, and the returns therefor. SECTION 9. Effectivity. These regulations shall take effect upon publication in the Official Gazette and shall supersede all regulations and rulings inconsistent herewith. (SGD.) DOMINADOR R. AYTONA Secretary Recommended By: (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue