R.A. 2343

REPUBLIC ACT No. 2343

AN ACT TO AMEND CERTAIN SECTIONS OF COMMONWEALTH ACT NUMBERED FOUR HUNDRED SIXTY-SIX, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES.

Section 1. Section twenty-one of Commonwealth Act Numbered Four hundred sixty-six, as amended by Republic Act Numbered Eighty-two, is hereby further amended to read as follows:

"Sec. 21. Rates of tax on citizens or residents.There shall be levied, collected, and paid annually upon the entire net income received in the preceding taxable year from all source by every individual, a citizen or resident of the Philippines, a tax equal to the sum of the following:

Section 2. Section twenty-two of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read as follows:

"Sec. 22. Tax on nonresident alien individual. (a) Non- resident alien engaged in trade or business within the Philippines. There shall be levied, collected, and paid for each taxable year upon the entire net income received from all sources within the Philippines by every non- resident alien individual engaged in trade or business with- in the Philippines the tax imposed by section twenty-one.

Section 3. Subsections (b) and (c) of section twenty-three of Commonwealth Act Numbered Four hundred sixty-six are amended to read as follows:

Section 4. Section twenty-four of Commonwealth Act Numbered Four hundred sixty-six, as amended, is further amended to read as follows:

"Sec. 24. Rate of tax on corporations.(a) Tax on domestic corporations. In general there shall be levied, 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 (companias 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:

"Twenty-two per centum upon the amount by which such total net income does not exceed one hundred thousand pesos; and

"Thirty per centum upon the amount by which such total net income exceeds one hundred thousand pesos; and a like tax shall be levied, collected, and paid annually upon the total net income received in the preceding taxable year from all sources within the Philippines by every corporation organized, authorized, or existing under the laws of any foreign country: Provided, however, That building and loan associations operating as such in accordance with sections one hundred and seventy-one to one hundred and ninety of the Corporation Law, as amended, as well as private educational institutions, shall pay a tax of twelve per centum and ten per centum, respectively, on their total net income: And provided, further, That in the case of dividends received by a domestic or resident foreign corporation from a domestic corporation liable to tax under this Chapter or from a domestic corporation engaged in a new and necessary industry, as defined under Republic Act Numbered Nine hundred and one, only twenty-five per centum thereof shall be returnable for purposes of the tax imposed by this section.

"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 in- vestment 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 bear the same ratio to such expenses as their total Philippine investment income bears to their total world investment income."

Section 5. Subsection (i) of section forty-five of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read as follows:

Section 6. Subsections (b) and (d) of section forty-six of Commonwealth Act Numbered Four hundred sixty-six, as amended, are hereby further amended to read as follows:

Section 7. Section forty-seven of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read as follows:

"Sec. 47. Extension of time to file returns. The Commissioner of Internal Revenue may, in meritorious cases, grant a reasonable extension of time for filing returns of income subject to the provisions of section fifty-one of this Code."

Section 8. Section fifty-one of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read 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 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 payer 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.

Section 9. Subsections (a)(1), (b), and (c), of section fifty-three of Commonwealth Act Numbered Four hundred sixty-six, as amended, are hereby further amended to read as follows:

Section 10. Section fifty-four of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read as follows:

"Sec. 54. Payment of corporation income tax at source. In the case of foreign corporations subject to taxation under this Title not engaged in trade or business within the Philippines and not having any office or place of business therein, there shall be deducted and withheld at the source in the same manner and upon the same items as is provided in section fifty-three a tax equal to thirty per centum thereof, and such tax shall be returned and paid in the same manner and subject to the same conditions as provided in that section."

Section 11. In lieu of section three hundred sixty of Commonwealth Act Numbered Four hundred sixty-six, as amended, which has been repealed by section eight, Commonwealth Act Numbered Five hundred eighty-six, insert a new section reading as follows:

"Sec. 360. Disposition of proceeds of income, inheritance, and gift taxes. Two and one-half per centum of the proceeds of the tax on income and of the tax on inheritance, legacies, and other acquisitions mortis causa, as well as on gifts, shall accrue to the municipalities, and the remaining ninety-five per centum shall accrue to the National Government. The proceeds accruing to the provinces and municipalities shall be apportioned either on the basis of population as shown by the latest official census or on the total amount of the respective tax collected during the fiscal year within the respective province or municipality, whichever will render the greater share to the local government.

"In addition to the foregoing, whenever the total annual collection of income taxes within a municipality or provinces, as the case may be, exceeds the total collection of such taxes within such municipality or province during the fiscal year nineteen hundred fifty-nine, all the excess shall be apportioned as follows: twenty per cent to the municipality, ten per cent to the province and seventy per cent to the National Government.

"Such provisions of Commonwealth Act Numbered Five hundred eighty-six as may be inconsistent with the fore- going are hereby repealed."

Section 12. Returns or information hereafter filed or required to be filed under Title II of Commonwealth Act Numbered Four hundred sixty-six, otherwise known as the National Internal Revenue Code, as amended, on or before the first day of March of each year shall, henceforth, be filed on or before the fifteenth day of April of each year.

Section 13. This Act shall take effect upon its approval: Provided, That the rate hereinabove stipulated shall apply to income received from January first, nineteen hundred and fifty-nine, and for fiscal periods ending after June thirty, nineteen hundred and fifty-nine.

Approved: June 20, 1959