Professional Documents
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and not gainfully employed or where such children are incapable of self-support because they are mentally or physically
defective.
5.
Computation of tax. The computation of the tax due from a non-resident citizen on income derived abroad is illustrated as
follows:
Mr. Juan de la Cruz, 35 years old, Filipino, married to Maria, with a dependent son, Jose and a resident of Los Angeles, California.
For U.S. Federal Income Tax purposes, he filed a joint return containing the following data and claimed the optional standard deductions and used
the optional tax tablets:
Income:
Wage, Salaries, Tips, Others
$7,814.65
Dividends received from qualified U.S.
domestic corporation
$482.50 less
exclusion $200.00
282.50
Interest Income on savings deposit
110.17
Income other than wages (Wife's prize
in photo contest)
200.00
AMOUNT REFUNDABLE
(191.97)
======
For Philippine income tax purposes, his income shall be computed as follows:
Gross Income
$8,407.32
ADD:
Excluded dividend income taxable
under Philippine Income Tax Law
200.00
Amount payable
$42.82
B.
On income derived from sources within the Philippines.
The tax due on income derived by a non-resident citizen from sources within the Philippines shall be computed in the same manner as the income
tax payable by resident citizens and resident aliens.
SECTION 6.
When and where to file. The return must be filed, and the tax due, if any, must be paid on or before April 15 following the
year for which the return is being filed with the Philippine Embassy or Office of the Consulate General nearest to the taxpayer's place of residence
or direct to the Commissioner of Internal Revenue, BIR Bldg., Diliman, Quezon City, Philippines.
If the return and payment, if any, are sent by mail, the same should be mailed on such a date as to reach the Philippine Embassy, Philippine
Consulate General or the Commissioner of Internal Revenue on or before April 15. The payment should be made in the form of an international
money order, bank draft or manager's check payable to the Commissioner of Internal Revenue.
If the return is filed and payment of the tax made in the Philippines by or for the non-resident citizen, the tax may be paid in Philippine currency, the
dollar amount of the tax to be converted into pesos at the rate of exchange prescribed by Revenue Memorandum Circular No. 21-78 for internal
revenue tax purposes.
When the tax due is in excess of two hundred dollars (U.S.$200.00), the non-resident citizen may elect to pay the tax in two equal
installments in which case, the first installment shall be paid at the time the return is filed and the second installment, on or before the fifteenth day
of July following the close of the calendar year. If any installment is not paid on or before the date fixed for its payment, the whole amount of the tax
unpaid becomes due and payable together with the delinquency penalties.
SECTION 7.
Repealing Clause. These regulations supersede Revenue Regulations No. 9-73 dated November 26, 1973. All existing rules,
regulations, administrative orders and general circulars or portion thereof, which are inconsistent herewith are hereby repealed, amended or
modified accordingly.
SECTION 8.
Effectivity. These regulations shall take effect immediately and shall apply to income earned beginning January 1, 1978.
ANNEX "A"
REPUBLIC OF THE PHILIPPINES
MINISTRY OF FINANCE
2
Manila
January 15, 1979
RULES AND REGULATIONS IMPLEMENTING P.D. 1469
SUBJECT
:
REGISTRATION OF EXPORT PRODUCERS AND TRADERS WITH THE PHILIPPINE EXPORT COUNCIL AND
AVAILMENT OF TAX BENEFITS FOR INDIRECT EXPORTS UNDER PRESIDENTIAL DECREE NO. 1469.
Pursuant to the provisions of Section 6 of Presidential Decree No. 1469 in relation to Sections 4 and 326 of the National Internal Revenue Code of
1977, as amended, these regulations are hereby promulgated.
SECTION 1.
Scope. These regulations shall govern the registration of export producers and traders with the Philippine Export Council
and the availment of tax benefits for indirect exports under Presidential Decree No. 1469.
SECTION 2.
Definition of Terms. For purposes of these regulations, the following definitions of terms are hereby adopted:
(a)
"Registered Export Producer" shall have the same meaning as defined under Section 187(y) of the National Internal Revenue Code, as
amended by P.D. 1469.
(b)
"Registered Export Trader" shall be understood as defined under Section 187(z) of the National Internal Revenue Code, as amended by
P.D. 1469.
(c)
"Export Sales" shall have the same meaning as defined under Section 187(aa) of the National Internal Revenue Code, as amended by
P.D. 1469.
(d)
For purposes of registration, "Philippine-made products" shall mean articles or products for export, manufactured, produced or processed
by registered export producers.
(e)
"Tax Exemption Certificate" shall mean the certificate issued by the Bureau of Internal Revenue that a registered export producer is
entitled to exemption from the payment of percentage tax on its export sales.
(f)
"Tax Credit Certificate" shall mean the certificate issued by the Bureau of Internal Revenue evidencing credits against internal revenue
taxes extended to registered export producers under Presidential Decree No. 1469. A tax credit certificate shall be non-transferable and it may be
used by the registered export producer against all internal revenue tax liabilities but in no case may it be used so as to result, in effect, in a refund.
SECTION 3.
Qualification for Registration. Any person, corporation, partnership or other entity doing business in the Philippines shall,
before registration, satisfy the Philippine Export Council that:
(a)
He or it is actually engaged in the manufacture, production or processing of articles or products in commercial quantity for export which
meet the quality standards set by the Bureau of Standards for such articles or products.
(b)
He or it is engaged or will engage in buying Philippine-made products from a registered export producer and subsequently exporting the
same.
SECTION 4.
Application for Registration.
(a)
Processing and Evaluation. In processing of applications for registration, the Council may, in its sound discretion, designate any
competent government agency to evaluate the applications, make factual determinations in relation thereto and submit its recommendations to the
Council. This is without prejudice to the automatic registration prescribed in P.D. 1584.
(b)
Filing. Applications for registration shall be filed with the Philippine Export Council or its delegate.
(c)
All applications shall be in the prescribed form and shall be subject to the payment of filing fees.
(d)
Supporting documents. The documents to be submitted by the applicant in support of its application are:
1.
In the case of juridical entities Articles of Incorporation or Partnership or any other document evidencing the legal existence of the
applicant.
2.
Resolution of the Board of Directors authorizing the filing of the application, in case of corporation, or by the Managing Partners in case of
a partnership.
3.
Audited financial statements of the applicant, viz: profit and loss statements and balance sheets for the two immediately preceding years
if applicant has been in operation for such period; otherwise only such financial statements during the period it has been in operation.
4.
Export market projections showing expected revenues, selling and other administrative costs.
5.
Other papers as may reasonably be required by the Philippine Export Council and/or its delegate.
The foregoing documents shall be certified true copies of the original documents.
(e)
Incomplete Papers. Upon filing of the application, the Philippine Export Council and/or its delegate shall require the applicant to submit
all required papers not filed with the application within a period to be prescribed by the Philippine Export Council or its delegate. Failure to comply
within said period shall be construed as abandonment of the application.
SECTION 5.
Certificate of Registration. The Certificate of Registration shall be issued by the Philippine Export Council. Copies of the
Certificate shall be furnished the delegate of the Philippine Export Council and the Bureau of Internal Revenue.
SECTION 6.
All conditions and requirements for registration prescribed by the Council and/or its delegate shall be taken into account by the
Bureau of Internal Revenue in the determination of tax benefits for indirect exports.
SECTION 7.
Availment of Tax Benefits. The tax benefits for indirect exports provided in Section 3 of P.D. 1469 shall be available to
registered export producers who are registered with the Council.
(a)
Tax Exemption The Bureau of Internal Revenue shall issue a Certificate of Tax Exemption covering the sales of registered export
producers to:
1.
other registered export producers, or cdtai
2.
registered exports traders, or
3.
foreign tourists and travelers;
provided the articles or products sold were actually exported on or before the 20th day of the month following the calendar quarter when the sale
took place.
In order to substantiate the claim for tax exemption, the registered export producer must submit to the Bureau of Internal Revenue the following
documents:
1.
A photostatic copy of the certificate of registration issued by the Philippine Export Council; and
2.
Copies of invoices, bills of lading, inward letters of credit, landing certificates, and other commercial documents evidencing the actual
exportation of products and/or articles sold.
(b)
Tax Credit The Bureau of Internal Revenue shall issue appropriate tax credit certificates only to export producers registered with the
Council.
A registered export producer can avail of the tax credit in the following situations:
A.
Sale by a registered export producer to another registered export producer:
1)
Where the tax is billed as a separate item in the sales invoice, the purchaser (2nd registered export producer) can claim tax credit for the
taxes paid on raw materials, parts or components purchased and utilized in the manufacture or production of its export articles;
2)
Where the tax is not billed as a separate item in the sales invoice, the seller (1st registered export producer) is the one entitled to claim
the tax credit for taxes paid on raw materials, parts or components utilized in the manufacture or production of finished articles and/or products
together with sales taxes paid on said articles or products sold to another registered export producer.
3
B.
Sale by registered export producer to a registered export trader and/or foreign tourists and travelers:
Whether or not the sales tax is billed as a separate item in the sales invoice, only the registered export producer can claim the tax credit for taxes
paid on raw materials, parts or components utilized in the manufacture or production of finished articles and/or products sold to a registered export
trader and/or foreign tourists and travelers.
In order to avail of the tax credit benefit pursuant to Section 202(f), second paragraph of the Tax Code, the following documents shall be submitted
to the Bureau of Internal Revenue:
1.
A written application for said tax credit, which must be filed within one (1) year from date of the actual exportation of the product and/or
article, together with the copies of shipping or other documents evidencing actual exportation; and
2.
Sales invoices or other documents from suppliers or sellers of raw materials, part, accessory or other article forming part of the finished
product exported.
Illustrative examples on the manner of availment of incentives are shown in Illustration Nos. 1, 2, 3 and 4 of Annex "A".
SECTION 8.
Cancellation of Registration. Any Certificate of Registration issued under this Decree may be revoked/cancelled by the
Philippine Export Council on its own initiative or upon recommendation of its designated government agency on the following grounds:
(a)
Violation of the provisions of Presidential Decree 1469 or of these rules and regulations; or
(b)
Violation of any law relating to taxation, currency, immigration national security and economy; or
(c)
Failure to meet the standards set by the Bureau of Standards on their products for export.
SECTION 9.
Applicability to Existing Enterprises. Registered export producers and export traders with the Board of Investments shall be
automatically registered with the Council: Provided, however, that an export producer registered under this Decree, which is entitled to benefits
under other laws, shall not concurrently avail of the tax benefits accruing to its registered activity under this Decree and other laws.
SECTION 10.
Repealing Clause. All rules and regulations inconsistent herewith shall be deemed revoked or amended accordingly.
SECTION 11.
Publication and Effectivity. These rules and regulations shall take effect fifteen (15) days after its publication in a newspaper
of general circulation.
ANNEX "B"
ILLUSTRATIVE EXAMPLES
SITUATION NO. 1. SALE BY REGISTERED EXPORT PRODUCER TO
ANOTHER REGISTERED EXPORT PRODUCER.
Illustration No. 1. Where the tax is Billed as a Separate Item in the Sales Invoice.
(A)
Sale by a Registered Export Producer to Another Registered Export Producer Considered "Export Sales" During the Quarter When the
Sale was Consummated.
FACTS: On February 5, 1979, "B", a registered export producer, purchased from "A", a domestic manufacturer, P88,000.00 worth of raw materials
of which the sales tax in the amount of P8,000.00 was separately billed in the sales invoice. "B" utilized these raw materials in the manufacture of
his finished articles which he thereafter sold to "C", another registered export producer, for P110,000.00 wherein the P10,000.00 sales tax was billed
as a separate item in the sales invoice. "C" also utilized these finished articles he purchased from "B" as raw materials or input in the manufacture
of his finished articles which he exported on March 20, 1979.
(1)
Manner of Invoicing:
(a)
Invoicing by "A" to "B":
Selling Price
P80,000.00
10% Sales Tax
8,000.00
Total
P88,000.00
=========
(b)
Invoicing by "B" to "C":
Selling Price
P100,000.00
10% Sales Tax
10,000.00
Total
P110,000.00
=========
(2)
Recommended Accounting Entries:
IN THE BOOKS OF "B"
Purchases
P80,000.00
Deferred Tax Credit
8,000.00
Cash/Accts. Payable
P88,000.00
To record purchase of raw materials from "A".
#
Cash/Accounts Receivable P110,000.00
Sales
P100,000.00
Sales Tax Payable
10,000.00
To record sales of manufactured articles to "C".
IN THE BOOKS OF "C "
Purchases
P100,000.00
Deferred Tax Credit
10,000.00
Cash/Accts. Payable
P110,000.00
To record purchase of raw materials from "B".
#
(3)
Determination of Sales Tax Liability:
The sale made by "B" to "C" is not subject to sales tax. The sale between them and the subsequent actual exportation by "C" of his manufactured
products both occurred within the quarter when the sale took place. Since the sales tax was billed as a separate item in the sales invoice issued by
"B" to "C", the following are the recommended accounting entries:
IN THE BOOKS OF "B"
Sales Tax Payable
P10,000.00
Miscellaneous Income
P2,000.00
Deferred Tax Credit
P8,000.00
To take up recognition of income and to offset sales tax payable against deferred tax credit as a result of exemption from sales tax.
#
IN THE BOOKS OF "C"
Purchases
P2,000.00
Tax Credit Receivable
8,000.00
4
To payment of final sales tax during the quarter when sale was considered domestic sale.
Tax Credit Receivable
P11,000.00
Deferred Tax Credit
P11,000.00
To set up availment of tax credit when sale was considered as export sale.
#
OR THE FOLLOWING ALTERNATIVE ENTRIES:
Sales Tax Expense P11,000.00
Deferred Tax Credit
P8,000.00
Cash
3,000.00
To take up payment of the final sales tax during the quarter when sale was considered domestic sale.
#
Tax Credit Receivable
P11,000.00
Miscellaneous Income
P11,000.00
To record availment of tax credit in the quarter when the sale was considered export sales.
#
IN THE BOOKS OF "C"
NONE
SITUATION NO. 2 SALE BY REGISTERED EXPORT PRODUCER TO A REGISTERED EXPORT TRADER.
ILLUSTRATION NO. 3. Where the tax is billed as a separate item in the sales invoice.
(A)
FACTS: X, a registered export producer, purchased P88,000.00 worth of raw materials of which P8,000.00 tax was billed as a separate
item in the sales invoice which he utilized in the manufacture or production of his finished articles he sold to "Z", a registered export trader, on
February 5, 1979 and who subsequently exported the same on March 20, 1979. The manner of invoicing the sale by "X" was as follows:
Selling Price
P100,000.00
10% Sales Tax
10,000.00
TOTAL
P110,000.00
=========
The sale of "X" to "Z" and the subsequent actual exportation by "Z" occurred within the same quarter and the sales tax was billed as a separate item
in the sales invoice of "X".
Recommended Accounting Entries:
IN THE BOOKS OF "X"
Purchases
P80,000.00
Deferred Tax Credit
8,000.00
Cash/Accounts Payable
P88,000.00
To take up purchases of raw materials.
#
Accts. Receivable/Cash
P110,000.00
Sales
P100,000.00
Sales Tax Payable 10,000.00
To take up sales made.
#
IN THE BOOKS OF "Z"
Purchases
P110,000.00
Cash/Accounts Payable
P110,000.00
Purchase of raw materials from "X".
Determination of the sales tax liability of "X":
Selling Price
P100,000.00
=========
Sales Tax Due
EXEMPT
Recommended Accounting Entries:
Sales Tax Payable P10,000.00
Deferred Tax Credit
P8,000.00
Misc. Income
2,000.00
To take up recognition of income and to offset sales tax payable against deferred tax credit as a result of exemption from sales tax.
IN THE BOOKS OF "Z"
NONE
(B)
Similar facts as in Illustration No. 3(A) except that the exportation was made after the 20th day of the month following the close of the
calendar quarter when the sale between "X" and "Z" took place.
Since the sales tax was billed as a separate item in the invoice and that the actual exportation by "Z" took place after the 20th day of the month
following the close of the preceding calendar quarter, the sale of "X" to "Z" shall be considered "domestic sale" during the said quarter.
Determination of Sales Tax Liability of "X":
Selling Price
P100,000.00
=========
Sales Tax Due
P10,000.00
LESS: Tax Credit
8,000.00
Selling Price
P110,000.00
=========
Accounting Entries:
IN THE BOOKS OF "X"
Cash/Accounts Receivable
P110,000.00
Sales
P110,000.00
To record sales of manufactured products to "Z".
Tax Credit Receivable
P8,000.00
Deferred Tax Credit P8,000.00
To set up availment of tax credit (when sales was considered as domestic sale.)
#
IN THE BOOKS OF "Z"
NONE
(B)
Similar facts as in Illustration No. 3(A) except that the sales tax was not billed as a separate item in the sales invoice and the sale of "X"
to "Z" and actual exportation by "Z" was made after the 20th day of the month following the preceding calendar quarter when the sale between "X"
and ''Z" took place and therefore considered as "domestic sale".
Determination of sales tax liability of "X":
Selling Price
P110,000.00
=========
Sales Tax Due
P11,000.00
LESS: Tax Credit 8,000.00