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TITLE I
SECTION 1. Title of the Code. - This Code shall be known as the
National Internal Revenue Code of 1997.
TITLE II
CHAPTER I - DEFINITIONS
Not over 5%
P100,000
On any amount in excess of 10%
P100,000
CHAPTER VI
COMPUTATION OF GROSS INCOME
SEC. 32. Gross Income. -
SEC. 45. Period for which Deductions and Credits Taken. - The
deductions provided for in this Title shall be taken for the taxable
year in which 'paid or accrued' or 'paid or incurred', dependent upon
the method of accounting the basis of which the net income is
computed, unless in order to clearly reflect the income, the
deductions should be taken as of a different period. In the case of
the death of a taxpayer, there shall be allowed as deductions for
the taxable period in which falls the date of his death, amounts
accrued up to the date of his death if not otherwise properly
allowable in respect of such period or a prior period.
SEC. 46. Change of Accounting Period. If a taxpayer, other than
an individual, changes his accounting period from fiscal year to
calendar year, from calendar year to fiscal year, or from one fiscal
year to another, the net income shall, with the approval of the
Commissioner, be computed on the basis of such new accounting
period, subject to the provisions of Section 47.
(B) Exception. - The tax imposed by this Title shall not apply to
employee's trust which forms part of a pension, stock bonus or
profit-sharing plan of an employer for the benefit of some or all of
his employees (1) if contributions are made to the trust by such
employer, or employees, or both for the purpose of distributing to
such employees the earnings and principal of the fund accumulated
by the trust in accordance with such plan, and (2) if under the trust
instrument it is impossible, at any time prior to the satisfaction of all
liabilities with respect to employees under the trust, for any part of
the corpus or income to be (within the taxable year or thereafter)
used for, or diverted to, purposes other than for the exclusive
benefit of his employees: Provided, That any amount actually
distributed to any employee or distributee shall be taxable to him in
the year in which so distributed to the extent that it exceeds the
amount contributed by such employee or distributee.
(B) Payroll Period. - The term 'payroll period' means a period for
which payment of wages is ordinarily made to the employee by his
employer, and the term 'miscellaneous payroll period' means a
payroll period other than, a daily, weekly, biweekly, semi-monthly,
monthly, quarterly, semi-annual, or annual period.
(D) Employer. - The term 'employer' means the person for whom
an individual performs or performed any service, of whatever
nature, as the employee of such person, except that:
(1) If the person for whom the individual performs or
performed any service does not have control of the payment of
the wages for such services, the term 'employer' (except for
the purpose of Subsection(A) means the person having control
of the payment of such wages; and
(2) In the case of a person paying wages on behalf of a
nonresident alien individual, foreign partnership or foreign
corporation not engaged in trade or business within the
Philippines, the term 'employer' (except for the purpose of
Subsection(A) means such person.
(F) Husband and Wife. - When a husband and wife each are
recipients of wages, whether from the same or from different
employers, taxes to be withheld shall be determined on the
following bases:
(1) The husband shall be deemed the head of the family and
proper claimant of the additional exemption in respect to any
dependent children, unless he explicitly waives his right in
favor of his wife in the withholding exemption certificate.
(2) Taxes shall be withheld from the wages of the wife in
accordance with the schedule for zero exemption of the
withholding tax table prescribed in Subsection (D)(2)(d)
National Internal Revenue Code pg. 139
hereof.
TITLE III
ESTATE AND DONORS TAXES
CHAPTER I - ESTATE TAX
SEC. 85. Gross Estate. - the value of the gross estate of the
decedent shall be determined by including the value at the time of
his death of all property, real or personal, tangible or intangible,
wherever situated: Provided, however, that in the case of a
nonresident decedent who at the time of his death was not a citizen
of the Philippines, only that part of the entire gross estate which is
situated in the Philippines shall be included in his taxable estate.
SEC. 86. Computation of Net Estate. - For the purpose of the tax
imposed in this Chapter, the value of the net estate shall be
determined:
(A) In General. - The tax for each calendar year shall be computed
on the basis of the total net gifts made during the calendar year in
accordance with the following schedule:
If the net gift is:
P 100,000 Exempt
P 100,000 200,000 0 2% P100,000
SEC. 104. Definitions. - For purposes of this Title, the terms 'gross
estate' and 'gifts' include real and personal property, whether
tangible or intangible, or mixed, wherever situated: Provided,
however, That where the decedent or donor was a nonresident
alien at the time of his death or donation, as the case may be, his
real and personal property so transferred but which are situated
outside the Philippines shall not be included as part of his'gross
estate' or 'gross gift': Provided, further, That franchise which must
be exercised in the Philippines; shares, obligations or bonds issued
National Internal Revenue Code pg. 168
by any corporation or sociedad anonima organized or constituted in
the Philippines in accordance with its laws; shares, obligations or
bonds by any foreign corporation eighty-five percent (85%) of the
business of which is located in the Philippines; shares, obligations
or bonds issued by any foreign corporation if such shares,
obligations or bonds have acquired a business situs in the
Philippines; shares or rights in any partnership, business or industry
established in the Philippines, shall be considered as situated in the
Philippines: Provided, still further, that no tax shall be collected
under this Title in respect of intangible personal property: (a) if the
decedent at the time of his death or the donor at the time of the
donation was a citizen and resident of a foreign country which at
the time of his death or donation did not impose a transfer tax of
any character, in respect of intangible personal property of citizens
of the Philippines not residing in that foreign country, or (b) if the
laws of the foreign country of which the decedent or donor was a
citizen and resident at the time of his death or donation allows a
similar exemption from transfer or death taxes of every character or
description in respect of intangible personal property owned by
citizens of the Philippines not residing in that foreign country.
The term 'deficiency' means: (a) the amount by which tax imposed
by this Chapter exceeds the amount shown as the tax by the donor
upon his return; but the amount so shown on the return shall first be
increased by the amount previously assessed (or Collected without
assessment) as a deficiency, and decreased by the amounts
previously abated, refunded or otherwise repaid in respect of such
tax, or (b) if no amount is shown as the tax by the donor, then the
amount by which the tax exceeds the amounts previously
assessed, (or collected without assessment) as a deficiency, but
such amounts previously assessed, or collected without
assessment, shall first be decreased by the amount previously
abated, refunded or otherwise repaid in respect of such tax.
National Internal Revenue Code pg. 169
TITLE IV
CHAPTER I - IMPOSITION OF TAX
(a) The time for filing the return at intervals other than the
time prescribed in the preceding paragraphs for a
particular class or classes of taxpayers after considering
such factors as volume of sales, financial condition,
adequate measures of security, and such other relevant
information required to be submitted under the pertinent
provisions of this Code; and
If the amount of
insurance exceeds
Php100,000.00 but
does not exceed Php10.00
National Internal Revenue Code pg. 263
Php300,000.00
If the amount of
insurance exceeds
Php300,000.00 but
does not exceed
Php500,000.00 Php25.00
If the amount of
insurance exceeds
Php500,000.00 but
does not exceed
Php750,000.00 Php50.00
If the amount of
insurance exceeds
Php750,000.00 but
does not exceed
Php1,000,000.00 Php75.00
If the amount of
insurance exceeds
Php1,000,000.00 Php100.00"
SEC. 184. Stamp Tax on Policies of Insurance Upon Property. -
On all policies of insurance or other instruments by whatever name
the same may be called, by which insurance shall be made or
renewed upon property of any description, including rents or profits,
against peril by sea or on inland waters, or by fire or lightning, there
shall be collected a documentary stamp tax of Fifty centavos
(P0.50) on each Four pesos (P4.00), or fractional part thereof, of
the amount of premium charged: Provided, however, That no
documentary stamp tax shall be collected on reinsurance contracts
National Internal Revenue Code pg. 264
or on any instrument by which cession or acceptance of insurance
risks under any reinsurance agreement is effected or recorded.
Title X
STATUTORY OFFENSES AND PENALTIES
CHAPTER I - ADDITIONS TO THE TAX