QuestionsQuestions (PRESIDENTIAL DECREE NO. 69[1])
It comprehends the assessment and collection of all national internal revenue taxes, fees, and charges; enforcement of forfeitures, penalties, and fines connected therewith; execution of judgments in cases decided in its favor by the Court of Tax Appeals and ordinary courts; and giving effect to and administering the supervisory and police power conferred by the Code or other laws.
Regulations must specify/prescribe/define matters such as: (1) the time/manner for provincial treasurers to canvass provinces for taxable persons; (2) label/brand/mark requirements for goods subject to a specific tax; (3) procedures for goods intended for export that would otherwise be subject to specific tax; (4) conditions and manner of legal actions/proceedings by revenue officers; (5) recordkeeping for persons authorized to keep prohibited drugs; (6) import/storage/removal/marking of opium; (7) transfer rules for prohibited drugs; (8) bonded warehouse conveyance/storage/records; (9) denaturing alcohol conditions; and many other enumerated items including stamp collection/cancellation and income tax return reporting/statistics.
With approval of the Secretary of Finance, the Commissioner divides the Philippines into revenue districts as required for administrative purposes; each district is under the supervision of a Revenue District Officer.
Within his region/district offices, he implements laws/policies/plans/programs/rules; administers/enforces internal revenue laws and regulations (including assessment and collection); provides economical/efficient/effective service; coordinates with regional offices and other agencies; coordinates with LGUs; exercises control and supervision over officers/employees; and performs other legally delegated functions.
He must ensure that laws and regulations affecting national internal revenues are faithfully executed and complied with, and help prevent/detect/punish frauds or delinquencies. He must also examine the efficiency of supervised officers/employees and report in writing to the Commissioner (through the Regional Director) any neglect of duty, incompetency, delinquency, or malfeasance with facts and evidence.
The Commissioner of Internal Revenue, Deputy Commissioners, chiefs/assistant chiefs of divisions, special deputies, internal revenue officers, and any other BIR employee specially deputized by the Commissioner—when conducting official matters/investigations within the Bureau’s jurisdiction.
A tax is imposed on the taxable net income received during each taxable year from all sources by each individual citizen/resident, determined according to the provided progressive schedule (with special handling for nonresident citizens).
Nonresident citizens are subject to tax under the schedule only on income derived from sources within the Philippines.
A nonresident citizen is one who establishes to the satisfaction of the Commissioner the fact of physical presence abroad for an uninterrupted period that includes an entire taxable year.
(a) Nonresident alien engaged in trade/business within the Philippines: taxed using the Sec. 21 schedule on entire net income received from all sources within the Philippines. It also provides that coming and staying in the Philippines for an aggregate period of more than 180 days during any calendar year makes the alien a nonresident alien doing business in the Philippines (notwithstanding Section 84(f) to the contrary). (b) Nonresident alien not engaged in trade/business: taxed at 30% of specified types of Philippine-source income (interest, dividends, rents, salaries, wages, premiums, annuities, compensation, emoluments, or other fixed/determinable annual/periodical/casual gains, profits and income, and capital gains).
(1) Single (or married legally separated): P1,800. (2) Married persons or heads of family: P3,000, with only one P3,000 exemption for husband and wife when not legally separated.
P1,000 for each legitimate, recognized natural, or adopted child wholly dependent upon and living with the taxpayer, subject to age/unmarried/not gainfully employed or incapable of self-support requirements; only if the taxpayer is head of the family; and total dependents for which additional exemptions may be claimed shall not exceed four.
Domestic corporations: 25% on the amount by which taxable net income does not exceed P100,000; and 35% on the amount by which taxable net income exceeds P100,000.
Foreign corporations not engaged in trade/business in the Philippines pay 35% of gross income from all sources within the Philippines (with certain exclusions such as reinsurance premiums from premiums). Cinematographic film owners/lessors/distributors pay 15% of gross income.
Gross income includes gains, profits, and income from services/compensation; professions/vocations/trades/businesses/commerce; sales or dealings in property; interests/rents/dividends; transactions for gain; and gains/income from any source. Examples excluded: (1) proceeds of life insurance policies paid to beneficiaries upon death; (2) amount received by insured as return of premium; (3) value of property acquired by gift/bequest/devise/descent (though income from such property is included).
Deductible are ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business, including reasonable salary/compensation for personal services actually rendered, traveling expenses while away from home in pursuit of business, and rentals/payments required to continue use/possession of property used for the business. For individuals, entertainment expenses are deductible only up to the lesser of P1,000 or 5% of gross income, and excess claims must be supported by vouchers/receipts.