Republic Act No. 1855

REPUBLIC ACT No. 1855

AN ACT TO PLACE LIFE INSURANCE COMPANIES ON AN NEW INCOME TAX BASIS BY AMENDING SECTIONS TWENTY-FOUR AND THIRTY-TWO OF COMMONWEALTH ACT NUMBERED FOUR HUNDRED AND SIXTY-SIX, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED.

Section 1. Section twenty-four of Commonwealth Act Numbered Four hundred and sixty-six, otherwise known as the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

Section 2. Section thirty-two of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:

Section 3. This Act shall take effect upon its approval.

Approved: June 22, 1957.

"Sec. 24. Rate of Tax on Corporations. (A) In general there shall be levied, assessed, collected, and paid annually upon the total net income received in the preceding taxable year from all sources by every corporation organized in, or existing under the laws of the Philippines, no matter how created or organized, but not including duly registered general copartnerships (compañias colectivas), domestic life insurance companies and foreign life insurance companies doing business in the Philippines, a tax upon such income equal to the sum of the following:

"The total net investment income of domestic life insurance companies is the gross investment income received during the taxable year from rents, dividends, and interest less deductions for real estate expenses, depreciation, interest paid within the taxable year on its indebtedness, except on indebtedness incurred to purchase or carry obligation the interest upon which is wholly exempt from taxation under existing laws, and such investment expenses paid during the taxable year as are ordinary and necessary in the conduct of the investments; and the total net investment income of foreign life insurance companies doing business in the Philippines is that portion of their gross world investment income which bears the same ratio to such income as their total Philippine reserve bears to their total world reserve less that portion of their total world investment expenses which bears the same ratio to such expenses as their total Philippine investment income bears to their total world investment income."

"Sec. 32. Special provisions regarding income and deductions of insurance companies, whether domestic or foreign. (a) Special deductions allowed to insurance companies. In the case of insurance companies, except domestic life insurance companies and foreign life insurance companies doing business in the Philippines, the net additions, if any, required by law to be made within the year to reserve funds and the sums other than dividends paid within the year on policy and annuity contracts may be deducted from their gross income: Provided, however, That the released reserved be treated as income for the year of release.