Place of Payment of Internal Revenue Taxes by Large Taxpayers

February 24, 1993

REPUBLIC ACT NO. 7646

AN ACT AUTHORIZING THE COMMISSIONER OF INTERNAL REVENUE TO PRESCRIBE THE PLACE FOR PAYMENT OF INTERNAL REVENUE TAXES BY LARGE TAXPAYERS, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED

 Paragraph (j) of Section 4 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows: acd

"(j) The manner in which internal revenue taxes such as income tax including withholding tax, estate and donor's taxes, value-added tax, other percentage taxes, excise taxes, and documentary stamps taxes shall be paid through the collection officers of the Bureau of Internal Revenue or through duly accredited banks which are hereby deputized to receive payments of such taxes and the returns, papers, and statements that may be filed by the taxpayers in connection with the payment of the tax: Provided, however, That, notwithstanding, the other provisions of this Code prescribing the place of filing of returns and payment of taxes, the Commissioner may by regulations require that the tax returns, papers, and statements and taxes of large taxpayers be filed and paid, respectively, through collections officers or through duly accredited banks: Provided, further, That the Commissioner can exercise this power within six (6) days from the approval of this Act or the completion of its comprehensive computerization program, whichever comes earlier: Provided, finally, That separate venues for the Luzon, Visayas, and Mindanao areas may be designated for the filing of tax returns and payment of taxes by said large taxpayers.

"For purposes of this section, "large taxpayer" means a taxpayer who satisfies any of the following criteria:

"(1) Value-added tax (VAT) — Business establishment with VAT paid or payable of at least One hundred thousand pesos for any quarter of the preceding taxable year; cdt

"(2) Excise tax — Business establishment with excise tax paid or payable of at least One million pesos for the preceding taxable year;

"(3) Corporate income tax — Business establishment with annual income tax paid or payable of at least One million pesos for the preceding taxable year; and

"(4) Withholding tax — Business establishment with withholding tax payment or remittance of at least One million pesos for the preceding taxable year.

"Provided, however, That the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, may modify or add to the above criteria for determining a large taxpayer after considering such factors as inflation, volume of business, wage and employment levels, and similar economic factors. cdt

"The penalties prescribed under Section 248 of this Code shall be imposed on any violation of the regulations issued by the Commissioner of Internal Revenue prescribing the place of filing of returns and payments of taxes by large taxpayers.

 Paragraph (b) of Section 5 of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

"(b) Receipts for payment made — It shall be the duty of the Commissioner or his duly authorized representative or a duly accredited bank to whom any payment of any taxes is made under the provisions of this Code to acknowledge the payment of such tax, expressing the amount paid and the particular account for which such payment was made in a form and manner prescribed therefor by the Commissioner.

 Section 204(1) of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

"Sec. 204. Authority of the Commissioner to compromise, abate, and refund/credit taxes. — The Commissioner may

"(1) Compromise the payment of any internal revenue tax when —

"(a) A reasonable doubt as to the validity of the claim against the taxpayer exists; or

"(b) The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax: Provided, however, That final assessments issued against large taxpayers as defined under Section 4 of this Code shall not be compromised for less than fifty percent (50%). Any such compromise involving said taxpayers lower than fifty (50%) shall be subject to the approval of the Secretary of Finance. aisa dc

SECTION 4. The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, shall promulgate the necessary rules and regulations for the effective implementation of the provisions of this Act.

SECTION 5. All laws, decrees, orders, rules and regulations, and other issuances inconsistent with this Act are hereby repealed or amended accordingly.

SECTION 6. This Act shall take effect upon its approval.

Approved: February 24, 1993 cd i

Published in the Official Gazette, Vol. 89 No. 13 page 1646 on March 29, 1993.