COMMONWEALTH ACT NO. 117 - AN ACT TO AMEND SECTIONS ONE, THREE, SEVEN, EIGHT, TEN, SEVENTEEN, AND TWENTY-ONE OF ACT NUMBERED TWENTY-EIGHT HUNDRED AND THIRTY-THREE AS AMENDED BY ACTS NUMBERED TWENTY-NINE HUNDRED AND TWENTY-SIX, THIRTY HUNDRED AND TWENTY-SIX, THIRTY-SIX HUNDRED AND FIVE, AND THIRTY-SEVEN HUNDRED AND SIXTY-ONE, REGARDING INCOME TAX |
Section
1. Subsection (b) of section one of Act Numbered Twenty-eight hundred
and thirty-three, as amended by section one of Act Numbered Twenty-nine
hundred and twenty-six, is hereby further amended to read as
follows: "(b) In
addition to the income tax imposed by subdivision (a) of this section,
herein referred to as the normal tax, there shall be levied, assessed,
collected, and paid upon the total net income of every individual, or,
in the case of a non-resident alien, the total net income received from
all sources within the Philippines, an additional income tax of one per
centum per annum upon the amount by which such total net income exceeds
ten thousand pesos and does not exceed thirty thousand pesos; two per
centum per annum upon the amount by which such total net income exceeds
thirty thousand pesos and does not exceed fifty thousand pesos; three
per centum per annum upon the amount by which such total net income
exceeds fifty thousand pesos and does not exceed seventy thousand
pesos; four per centum per annum upon the amount by which such total
net income exceeds seventy thousand pesos and does not exceed ninety
thousand pesos; five per centum per annum upon the amount by which such
total net income exceeds ninety thousand pesos and does not exceed one
hundred ten thousand pesos; six per centum per annum upon the amount by
which such total net income exceeds one hundred ten thousand pesos and
does not exceed one hundred forty thousand pesos; seven per centum per
annum upon the amount by which such total net income exceeds one
hundred forty thousand pesos and does not exceed one hundred seventy
thousand pesos; eight per centum per annum upon the amount by which
such total net income exceeds one hundred seventy thousand pesos and
does not exceed two hundred thousand pesos; nine per centum per annum
upon the amount by which such total net income exceeds two hundred
thousand pesos and does not exceed two hundred thirty thousand pesos;
ten per centum per annum upon the amount by which such total net income
exceeds two hundred thirty thousand pesos and does not exceed two
hundred sixty thousand pesos; eleven per centum per annum upon the
amount by which such total net income exceeds two hundred sixty
thousand pesos and does not exceed three hundred thousand pesos; twelve
per centum per annum upon the amount by which such total net income
exceeds three hundred thousand pesos and does not exceed three hundred
sixty thousand pesos; fourteen per centum per annum upon the amount by
which such total net income exceeds three hundred sixty thousand pesos
and does not exceed four hundred twenty thousand pesos; sixteen per
centum per annum upon the amount by which such total net income exceeds
four hundred twenty thousand pesos and does not exceed four hundred
eighty thousand pesos; eighteen per centum per annum upon the amount by
which such total net income exceeds four hundred eighty thousand pesos
and does not exceed five hundred forty thousand pesos; twenty per
centum per annum upon the amount by which such total net income exceeds
five hundred forty thousand pesos and does not exceed six hundred
thousand pesos; twenty-three per centum per annum upon the amount by
which such total net income exceeds six hundred thousand pesos and does
not exceed one million pesos; twenty-six per centum per annum upon the
amount by which such total net income exceeds one million pesos and
does not exceed one million four hundred thousand pesos; twenty-nine
per centum per annum upon the amount by which such total net income
exceeds one million four hundred thousand pesos and does not exceed one
million eight hundred thousand pesos; thirty-two per centum per annum
upon the amount by which such total net income exceeds one million
eight hundred pesos and does not exceed two million two hundred
thousand pesos; thirty-six per centum per annum upon the amount by
which such total net income exceeds two million two hundred thousand
pesos. "For the purposes of the
additional tax there shall be included as income the income derived
from dividends or net earnings subject to the tax established in
subsection (a) of section ten. "All the provisions of this law relating to the normal tax on individuals, so far as they are applicable and are not inconsistent with this subdivision and section three, shall apply to the imposition, levy, assessment, and collection of the additional tax imposed under this subdivision." Section2. Section three of Act Numbered Twenty-eight hundred and thirty-three is hereby repealed, and there is enacted, in lieu thereof, as section three of the law, the following: "Section3. If any corporation,
joint-stock company, partnership, joint account (cuenta en
participacion), association, however created or organized, except banks
and insurance companies, is formed or availed of for the purpose of
preventing the imposition of the additional tax or surtax upon its
shareholders or members through the medium of permitting its gains and
profits to accumulate instead of being divided or distributed, there is
hereby levied and assessed against such corporation, joint-stock
company, partnership, joint account (cuenta en participacion), or
association for each taxable year a tax equal to twenty-five per centum
of the undistributed portion of its accumulated profits or surplus
which shall be in addition to the tax imposed by section ten, as
amended, and shall be computed, collected and paid in the same manner
and subject to the same provisions of law, including penalties, as that
tax." Section3. Section seven of Act Numbered Twenty-eight hundred and thirty-three, as amended by section five of Act Numbered Twenty-nine hundred and twenty-six, is hereby further amended to read as follows: "Section7. For the purpose of the
normal tax only, there shall be allowed as an exemption in the nature
of a deduction from the amount of the net income of each citizen or
residents of the Philippines, ascertained as provided in the law, the
sum of two thousand pesos plus two thousand pesos additional if the
person making the return be a married man with a wife not legally
separated from him, or plus the sum of two thousand pesos additional if
the person making the return be a married woman with a husband not
legally separated from her or an unmarried man or woman with one or
both parents or one or more brothers, or sisters or one or more
legitimate, recognized natural or adopted children dependent upon him
or her for support where such brothers, sisters, or children are less
than twenty-one years of age; but in no event shall this additional
exemption of two thousand pesos be deducted by both: Provided, That
only one deduction of four thousand pesos shall be made from the
aggregate income of both husband and wife when not legally separated:
Provided, further, That if the person making the return is the head of
a family, there shall be an additional exemption of five hundred pesos
for each legitimate, recognized natural, or adopted child dependent
upon such person, if such dependents are less than twenty-one years of
age, or incapable of self-support because mentally or physically
defective: Provided, further, That guardians or trustees shall be
allowed to claim this personal exemption as to income derived from the
property of which such guardian or trustees has charge in favor of each
ward or cestui que trust: Provided, finally, That in no event shall a
ward or cestui que trust be allowed a greater personal exemption than
as provided in this section, from the amount of net income received
from all sources. There shall also be allowed an exemption from the
amount of the net income of estates of deceased citizens or residents
of the Philippines during the period of administration or settlement,
and of trusts or other estates of citizens or residents of the
Philippines the income of which is not distributed annually or
regularly under the provisions of subdivision (b) of section two of
this Act the sum of two thousand pesos, including such deductions as
are allowed under section five. "A nonresident alien individual
shall be entitled to personal exemption in an amount equal to the
exemptions allowed by the income tax law in the country of which he is
a subject or citizen to citizens of the Philippines not residing in
such country, but not to exceed the amount fixed in this section as
exemption for citizens or residents of the Philippines: Provided, That
said nonresident alien file a true and accurate return of the total
income received by him from all sources in the Philippines, as required
by this Act." Section4. Subsection (b) of section eight of Act Numbered Twenty-eight hundred and thirty-three, as amended by section six of Act Numbered Twenty-nine hundred and twenty-six and section one of Act Numbered Thirty-six hundred and five, is hereby further amended to read as follows: "(b) On or
before the first day of March, nineteen hundred and thirty-seven, and
the first day of March in each year thereafter, a true and accurate
return under oath, shall be made by each person of lawful age, except
as hereinafter provided, having a gross income of two thousand pesos or
over for the taxable year to the Collector of Internal Revenue or
treasurer of the province, city, or municipality in which such person
has his legal residence or principal place of business in the
Philippines, with the Collector of Internal Revenue in such form and
manner as the latter, with the approval of the Secretary of Finance,
shall prescribe, setting forth specifically the gross amount of income
from all separate sources and deducting from the total thereof the
aggregate items of allowances authorized in this Act: Provided, That in
the case of married persons, whether citizens, resident or nonresident
aliens, only one consolidated return for the taxable year shall be
filed by either spouse to cover the income of both spouses; but where
it is impracticable for the spouse to file one consolidated return,
each spouse may file his separate return of income, but the returns so
filed shall be consolidated for the purpose of the normal and
additional income taxes prescribed in this Law: Provided, further, that
the Collector of Internal Revenue shall have authority to grant a
reasonable extension of time, in meritorious cases, for filing returns
of income: Provided, finally, That the aforesaid return may be made by
a representative when by reason of illness, absence, or non-residence,
the person liable for filing said return is unable to make and render
the same, the principal and his representative assuming the
responsibility of making the return and incurring penalties provided
for erroneous, false, or fraudulent returns." Section5. Section ten of Act Numbered Twenty-eight hundred and thirty-three, as amended by section seven of Act Numbered Twenty-nine hundred and twenty-six and section two of Act Numbered Thirty-seven hundred sixty-one, is hereby further amended to read as follows: "Section10. There shall be
levied, assessed, collected, and paid annually upon the total net
income received in the preceding calendar year from all sources by
every corporation, joint-stock company, partnership, joint account
(cuenta en participacion), association, or insurance company, organized
in the Philippines, no matter how created or organized, but not
including duly registered general co-partnerships (companias
colectivas), a tax of six per centum upon such income, and a like tax
shall be levied, assessed, collected, and paid annually upon the total
net income received in the preceding calendar year from all sources
within the Philippines by every corporation, joint stock company,
partnership, joint account (cuenta en participacion), association. or
insurance company organized, authorized, or existing under the laws of
any foreign country, including interest on bonds, notes or other
interest-bearing obligations of residents, corporate or otherwise:
Provided, however, That nothing in this section shall be construed as
permitting the taxation of the income derived from dividends or net
profits on which the normal tax has been paid. The gain derived or loss sustained from the sale or other disposition by a corporation, joint-stock company, partnership, joint account (cuenta en participacion), association, or insurance company, or property, real personal, or mixed, shall be ascertained in accordance with subsections (c) and (d) of section two of Act Numbered Two thousand eight hundred and thirty-three, as amended by Act Numbered Twenty-nine hundred and twenty-six. "The foregoing tax rate shall
apply to the net income received by every Taxable Corporation, joint -
stock company, partnership, joint account (cuenta en participacion),
association, or insurance company in the calendar year nineteen hundred
and thirty-six and in each year thereafter." Section6. Section seventeen of Act Numbered Twenty-eight hundred and thirty-three is hereby amended to read as follows: "Section17. Any
one liable to pay the tax, to make a return or to supply information
required under this law, who refuses or neglects to pay such tax, to
make such return or to supply such information at the time or times
herein specified in each year, shall be guilty of a less grave felony,
and shall be punished by a fine of not less than forty pesos nor more
than two thousand pesos, or by imprisonment for not more than six
months, or both, with the costs of prosecution, and with subsidiary
imprisonment in case of insolvency. "Any individual or any officer of
any corporation, joint stock company, partnership, joint account
(cuenta en participacion), association, insurance company, or general
co-partnerships (compania colectiva), required by law to make, render,
sign, or verify any return or to supply any information, who makes any
false or fraudulent return or statement with intent to defeat or evade
the assessment required by this law to be made, shall be guilty of less
grave felony, and shall be punished by a fine of not exceeding four
thousand pesos or by imprisonment for not exceeding one year, or both,
in the discretion of the court, with the costs of prosecution, and with
subsidiary imprisonment in case of insolvency: Provided, That where any
tax heretofore due and payable has been duly paid by the taxpayer, it
shall not be recollected from any withholding agent required to retain
it at its source, nor shall any penalty be imposed or collected in such
cases from the taxpayer, or such withholding agent whose duty it was to
retain it, for failure to return or to pay the same, unless such
failure was fraudulent and for the purpose of evading payment." Section7. Section twenty-one of Act Numbered Twenty eight hundred and thirty-three is hereby amended to read as follows: "Section21.Every corporation, joint-stock company, partnership, "joint account
(cuenta en participacion), association, or insurance company whether
domestic or foreign, subject to the tax herein imposed, or otherwise
engaged in business or trade within the Philippines, when required by
the Collector of Internal Revenue, shall render a correct return, duly
verified under oath, of its payments of profits or dividends, whether
made in cash or its equivalent in stock, including the names and
addresses of members or stockholders, the paid-up capital or the number
of shares owned by each, and the tax years and gains or earnings from
which such dividends or profits were derived, in such form as may be
prescribed by the Collector of Internal Revenue with the approval of
the Secretary of Finance. Any such corporation, firm, or association
which fails to keep records of the names and addresses of its members
or stockholders, or the correct amount of profits or dividends paid or
credited to each of them, or which fails to furnish; the information
referred to in this section together with certified copies of its
balance sheet, profit and loss statements and such other financial
statements which may be required by the Collector of Internal Revenue
shall pay to the Government an amount equal to ten per centum of the
dividends or profits distributed, or, in the absence of information as
to the amount of profits or dividends distributed, the additional
amount herein required to be paid shall be computed on the net profits
or income reported in the income tax returns or shown in the books of
such corporation, firm or association. However, resident foreign
corporations, firms, or associations, fifty-one per centum or more of
whose income is derived from sources outside of the 'Philippines shall
not be liable to the payment of the amount prescribed in this section." Section8.This Act shall take effect upon its approval and shall apply to income received from January first, nineteen hundred and thirty-six. |