Professional Documents
Culture Documents
REMEDIES
1.
Tax Administration
connection therewith.
It shall be the duty of every Revenue District Officer to examine the efficiency of all
officers and employees of the Bureau of Internal Revenue under his supervision,
and to report in writing to the Commissioner, through the Regional Director, any
neglect of duty, incompetency, delinquency, or malfeasance in office of any internal
revenue officer of which he may obtain knowledge, with a statement of all the facts
and any evidence sustaining each case.
SEC. 12. Agents and Deputies for Collection of National Internal Revenue
Taxes. - The following are hereby constituted agents of the Commissioner:
(a) The Commissioner of Customs and his subordinates with respect to the
collection of national internal revenue taxes on imported goods;
(b) The head of the appropriate government office and his subordinates with
respect to the collection of energy tax; and
(c) Banks duly accredited by the Commissioner with respect to receipt of payments
internal revenue taxes authorized to be made thru bank.
Any officer or employee of an authorized agent bank assigned to receive internal
revenue tax payments and transmit tax returns or documents to the Bureau of
Internal Revenue shall be subject to the same sanctions and penalties prescribed
in Sections 269 and 270 of this Code.
SEC. 13. - Authority of a Revenue Offices. - subject to the rules and regulations
to be prescribed by the Secretary of Finance, upon recommendation of the
Commissioner, a Revenue Officer assigned to perform assessment functions in
any district may, pursuant to a Letter of Authority issued by the Revenue Regional
Director, examine taxpayers within the jurisdiction of the district in order to collect
the correct amount of tax, or to recommend the assessment of any deficiency tax
due in the same manner that the said acts could have been performed by the
Revenue Regional Director himself.
SEC. 14. Authority of Officers to Administer Oaths and Take Testimony. - The
Commissioner, Deputy Commissioners, Service Chiefs, Assistant Service Chiefs,
Revenue Regional Directors, Assistant Revenue Regional Directors, Chiefs and
Assistant Chiefs of Divisions, Revenue District Officers, special deputies of the
Commissioner, internal revenue officers and any other employee of the Bureau
thereunto especially deputized by the Commissioner shall have the power to
administer oaths and to take testimony in any official matter or investigation
conducted by them regarding matters within the jurisdiction of the Bureau.
SEC. 15. Authority of Internal Revenue Officers to Make Arrests and Seizures.
- The Commissioner, the Deputy Commissioners, the Revenue Regional Directors,
the Revenue District Officers and other internal revenue officers shall have
authority to make arrests and seizures for the violation of any penal law, rule or
regulation administered by the Bureau of Internal Revenue. Any person so arrested
shall be forthwith brought before a court, there to be dealt with according to law.
SEC. 16. Assignment of Internal Revenue Officers Involved in Excise Tax
Functions to Establishments Where Articles subject to Excise Tax are
Produced or Kept. - The Commissioner shall employ, assign, or reassign internal
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revenue officers involved in excise tax functions, as often as the exigencies of the
revenue service may require, to establishments or places where articles subject to
excise tax are produced or kept: Provided, That an internal revenue officer
assigned to any such establishment shall in no case stay in his assignment for
more than two (2) years, subject to rules and regulations to be prescribed by the
Secretary of Finance, upon recommendation of the Commissioner.
SEC. 17. Assignment of Internal Revenue Officers and Other Employees to
Other Duties. - The Commissioner may, subject to the provisions of Section 16
and the laws on civil service, as well as the rules and regulations to be prescribed
by the Secretary of Finance upon the recommendation of the Commissioner,
assign or reassign internal revenue officers and employees of the Bureau of
Internal Revenue, without change in their official rank and salary, to other or special
duties connected with the enforcement or administration of the revenue laws as the
exigencies of the service may require: Provided, That internal revenue officers
assigned to perform assessment or collection function shall not remain in the same
assignment for more than three (3) years; Provided, further, That assignment of
internal revenue officers and employees of the Bureau to special duties shall not
exceed one (1) year.
SEC. 18. Reports of violation of Laws. - When an internal revenue officer
discovers evidence of a violation of this Code or of any law, rule or regulations
administered by the Bureau of Internal Revenue of such character as to warrant
the institution of criminal proceedings, he shall immediately report the facts to the
Commissioner through his immediate superior, giving the name and address of the
offender and the names of the witnesses if possible: Provided, That in urgent
cases, the Revenue Regional director or Revenue District Officer, as the case may
be, may send the report to the corresponding prosecuting officer in the latter case,
a copy of his report shall be sent to the Commissioner.
SEC. 19. Contents of Commissioner's Annual Report. - The annual Report of
the Commissioner shall contain detailed statements of the collections of the Bureau
with specifications of the sources of revenue by type of tax, by manner of payment,
by revenue region and by industry group and its disbursements by classes of
expenditures.
In case the actual collection exceeds or falls short of target as set in the annual
national budget by fifteen percent (15%) or more, the Commissioner shall explain
the reason for such excess or shortfall.
SEC. 20. Submission of Report and Pertinent Information by the
Commissioner.
(A) Submission of Pertinent Information to Congress. - The provision of Section
270 of this Code to the contrary notwithstanding, the Commissioner shall, upon
request of Congress and in aid of legislation, furnish its appropriate Committee
pertinent information including but not limited to: industry audits, collection
performance data, status reports in criminal actions initiated against persons and
taxpayer's returns: Provided, however, That any return or return information which
can be associated with, or otherwise identify, directly or indirectly, a particular
taxpayer shall be furnished the appropriate Committee of Congress only when
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gifts and such other rules and regulations which the Commissioner may
consider suitable for the enforcement of the said Title III; (i) The manner
in which tax returns, information and reports shall be prepared and
reported and the tax collected and paid, as well as the conditions under
which evidence of payment shall be furnished the taxpayer, and the
preparation and publication of tax statistics; (j) The manner in which
internal revenue taxes, such as income tax, including withholding tax,
estate and donor's taxes, value-added tax, other percentage taxes, excise
taxes and documentary stamp taxes shall be paid through the collection
officers of the Bureau of Internal Revenue or through duly authorized
agent banks which are hereby deputized to receive payments of such
taxes and the returns, papers and statements that may be filed by the
taxpayers in connection with the payment of the tax: Provided, however,
That notwithstanding the other provisions of this Code prescribing the
place of filing of returns and payment of taxes, the Commissioner may, by
rules and regulations, require that the tax returns, papers and statements
that may be filed by the taxpayers in connection with the payment of the
tax. Provided, however, That notwithstanding the other provisions of this
Code prescribing the place of filing of returns and payment of taxes, the
Commissioner may, by rules and regulations require that the tax returns,
papers and statements and taxes of large taxpayers be filed and paid,
respectively, through collection officers or through duly authorized agent
banks: Provided, further, That the Commissioner can exercise this power
within six (6) years from the approval of Republic Act No. 7646 or the
completion of its comprehensive computerization program, whichever
comes earlier: Provided, finally, That separate venues for the Luzon,
Visayas and Mindanao areas may be designated for the filing of tax
returns and payment of taxes by said large taxpayers.
For the purpose of this Section, 'large taxpayer' means a taxpayer who satisfies
any of the following criteria;
(1) Value-Added Tax (VAT) - Business establishment with VAT paid or payable of
at least One hundred thousand pesos (P100,000) for any quarter of the preceding
taxable year;
(2) Excise tax - Business establishment with excise tax paid or payable of at least
One million pesos (P1,000,000) for the preceding taxable year;
(3) Corporate Income Tax - Business establishment with annual income tax paid
or payable of at least One million pesos (P1,000,000) for the preceding taxable
year; and
(4) Withholding tax - Business establishment with withholding tax payment or
remittance of at least One million pesos (P1,000,000) for the preceding taxable
year.
Provided, however, That the Secretary of Finance, upon recommendation of the
Commissioner, may modify or add to the above criteria for determining a large
taxpayer after considering such factors as inflation, volume of business, wage and
employment levels, and similar economic factors.
The penalties prescribed under Section 248 of this Code shall be imposed on any
violation of the rules and regulations issued by the Secretary of Finance, upon
recommendation of the Commissioner, prescribing the place of filing of returns and
payments of taxes by large taxpayers.
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a)
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Section 3. Repealing Clause. All existing rules and regulations or parts thereof
which are inconsistent with the provisions of these Regulations are hereby
amended, repealed or revoked accordingly.
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occur: (a) the Commissioner communicates in writing that they have ceased to
qualify as taxpayers includible in the list of top twenty thousand (20,000) private
corporations, or (b) those officially identified to have ceased business operations,
or undergone any of the business combinations wherein by operation of law the
juridical personality of said taxpayers ceased."
SECTION 3. Repealing Clause. All existing rules and regulations or parts
thereof which are inconsistent with the provisions of these regulations are hereby
modified, amended, revoked or repealed accordingly.
SECTION 4. Effectivity. These regulations shall take effect fifteen (15) days
following publication in a newspaper of general circulation.
Revenue Regulations 16-2002 (October 11, 2002)
SUMMARY
All internal revenue taxes collected through AABs shall be credited to the
demand deposit accounts opened and maintained by the Bureau of Treasury
(BTr) for BIR in the head offices of AABs.
In filing a tax declaration and making payment to an AAB, the taxpayer must
accomplish and submit a BIR-prescribed deposit slip, which the bank teller
shall machine validate as evidence that the BIR tax payment has been
received and deposited to the account of the BTr.
Aside from the electronic payment system currently being used by some
taxpayers in paying their internal revenue taxes, the rest shall pay their tax
liabilities through any of the following modes:
1) over-the-counter cash payments (for each tax payment not exceeding P
10,000.00); 2) bank debit system; and
3) check payment system.
The following checks, however, are not acceptable as check payments for
internal revenue taxes: 1) accommodation checks; 2) second endorsed
checks; 3) stale checks; 4) postdated checks; 5) unsigned checks; and 6)
checks with alterations/erasures. Second indorsement of checks which are
payable to the Bureau of Internal Revenue or Commissioner of Internal
Revenue is absolutely prohibited. Each check should cover one tax type for
one return period only.
AABs are mandated to accept tax returns/payment forms partly paid through
any of the aforementioned modes of payment and partly through Tax Debit
Memos (TDM) duly and validly issued by the BIR. TDMs, however, are not
acceptable as payments for Withholding Taxes, Fringe Benefit Tax, and taxes,
fees and charges collected under special schemes/procedures/ programs of
the government/BIR.
Taxpayers are not required to enroll with any AAB where they intend to file
tax returns/payment forms and/or pay internal revenue taxes.
Any diversion, non-remittance or under-remittance of the taxes collected by
AABs through fault or negligence of the bank accepting such payment as well
as the diversion of any payment for BIR taxes using the facilities of the bank
through fault or negligence of any of the banks personnel shall subject the
bank to civil and criminal liabilities.
SUBJECT : Modes of and Procedure for the Payment of Internal Revenue Taxes
Through Authorized Agent Banks Amending Revenue Regulations No. 4-97, as
amended by Revenue Regulations No. 6-98
SECTION 1.
Scope. Pursuant to Section 244 of the National Internal
Revenue Code of 1997 (CODE) in relation to Sections 8, 12, 56, 58, 81, 103, 114,
128, 130, 200 and 245, all of the same Code, these Regulations are hereby
promulgated to amend Revenue Regulations No. 4-97, as amended by Revenue
Regulations No. 6-98, on the provisions relative to acceptable modes of
payment of internal revenue taxes coursed through authorized agent banks
(AABs), the recording of such payments and issuance of validated BIRprescribed deposit slips which likewise serve as acknowledgment receipts
for payments of taxes deposited by taxpayers for BTR-BIR account, and the
control mechanisms to deter and detect the diversion of tax payments.
SECTION 2.
A)
Transaction Date
Name of Taxpayer
TIN
Check Number
Amount
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E)
The bank teller shall machine validate the BIRprescribed deposit slip
accomplished by the taxpayer as evidence that the BIR tax payment was
deposited to the account of the BTr. Said deposit slip shall be
accomplished and issued in triplicate copies, distributed as follows:
original (taxpayers copy), duplicate (AABs copy) and triplicate (to be
attached to the tax return. Additionally, the AAB receiving the tax
return/payment form shall also machine validate and stamp mark the word
"Received" on the return/payment form as proof of filing the
return/payment form and payment of the tax by the taxpayer. The
machine validation on the return/payment form shall reflect the date of
payment, amount paid and transaction code, the name of the bank,
branch code, tellers code and tellers initials.
F) Before 12:00 NN of the following banking day, the head offices of the
AABs shall provide to BTR/BIR the daily total amount of BIR taxes they
collected.
G) After receipt of payment but not later than 24 hours thereafter, the AAB
branch shall encode into the LBDE System and transmit to the concerned
BIR Data Center, the below data and copy furnish the AAB head office.
1. Date of the transaction;
2. Name of the taxpayer;
3. Taxpayer Identification Number (TIN) of the taxpayer;
4. Tax type which is being paid for;
5. Return period for the tax type being paid for;
6. Amount of tax paid;
7. Name of the drawee bank and check number, for tax payments
through checks;
SECTION 3.
Modes of Payment to AABs. Aside from the electronic
payment system currently used by some taxpayers in paying their BIR taxes, the
rest shall pay their tax liabilities through any of the following modes: a) over
thecounter cash payments; b) bank debit system; or c) check payment system.
a)
b)
c)
(Below is sample of a check tax payment drawn from and presented to the same
bank.)
The following checks are not acceptable as check payments for internal revenue
taxes:
1.
2.
3.
4.
5.
6.
AABs accepting checks for the payment of BIR taxes and other charges must
see to it that the check covers one tax type for one return period only.
Moreover, AABs must strictly comply with the systems and procedures for the
reception, processing, clearing and accounting of the checks to be prescribed
under a separate regulation.
Second indorsement of checks which are payable to the Bureau of Internal
Revenue or Commissioner of Internal Revenue is absolutely prohibited.
SECTION 4.
Tax Returns Partly Paid Thru Tax Debit Memos (TDMs).
AABs are mandated to accept tax returns/payment forms partly paid thru any
of the modes of payment mentioned in Section 3 hereof and partly thru TDMs
duly and validly issued by the BIR. Before accepting the BIR tax return/payment
form partly paid thru tax debit memo, the AAB shall insure that the number of the
TDM is indicated in the BIR tax return/payment form in the same manner that the
check number/drawee bank and bank debit advice number are indicated in the tax
return/payment form paid thru check or bank debit system, respectively. A
photocopy of the tax credit certificate (TCC), front and back page, which was the
source of the TDM, together with a copy of the TDM, must be required from the
taxpayer and attached to the BIR tax return/payment form.
TDMs are, however, not acceptable as payments for withholding taxes, including
Fringe Benefit Tax (clarified and implemented under RR No. 2-98, as amended,
and RR No. 3-98), and for taxes, fees and charges collected under special
schemes/procedures/programs of the Government / BIR as discussed and
elucidated in a separate revenue regulation. AABs shall see to it that this restriction
is strictly observed in the BIR tax returns/payment forms they receive.
SECTION 5.
Enrollment of Taxpayers with Authorized Agent Bank Not
Required. Taxpayers are not required to enroll with any AAB where they
intend to file tax returns/payment forms and/or pay internal revenue taxes.
Taxpayers may file tax returns/payment forms and pay internal revenue taxes with
any AAB of the appropriate BIR office (Revenue District Office (RDO), Large
Taxpayers District Office (LTDO), or Large Taxpayers Service, etc., whichever is
applicable) where they are required to file the particular return/payment form.
SECTION 6.
Responsibility and Privilege of Taxpayers. Taxpayers shall
see to it that their tax returns/payment forms with payment are filed with and
internal revenue taxes paid to legitimate AABs of the BIR. Nonetheless, they
may confirm their tax payments with their home RDO/LTDO or LTDO/RDO where
they are required to file tax returns/payment form and pay internal revenue taxes.
SECTION 7.
Additional Liabilities/Responsibilities of Authorized Agent
Banks (AABs).
(a) Any diversion, non-remittance or under-remittance of the taxes collected
by AABs through fault or negligence of the bank accepting such payment as
well as the diversion of any payment for BIR taxes using the facilities of
the bank through fault or negligence of any of the banks personnel shall
subject the bank to civil and criminal liabilities provided for under
Sections 248 and 275 of the Tax Code, as amended, and other existing
laws, rules and regulations. AABs shall be liable to the BIR for double the
amount of taxes diverted and unremitted, plus the increments and
penalties prescribed by the Tax Code, as amended, but the total penalties
imposed may be reduced on meritorious grounds subject to the approval of the
majority of the members of the Management Committee (MANCOM) of the
BIR, composed of the Commissioner of Internal Revenue and the four (4)
Deputy Commissioners, where the Commissioner of Internal Revenue votes
for such reduction.
(b) The reports of AABs to be submitted to BTr/BIR (under Sec. 2) of all the tax
payments collected shall be in accordance with the forms prescribed by BIR.
(c) The requirements prescribed in these regulations shall be included in the
accreditation criteria to be mentioned in the Memorandum of Agreement to be
signed by and among the BTR, BIR and the AAB for compliance by all AABs.
Revenue Memorandum Circular 22-2012 (May 7, 2012)
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1.
2.
3.
4.
All BIR Rulings issued prior to Jan 1, 1998 are not to be used as
precedent by any taxpayer as a basis to secure rulings for themselves for
current business transaction/s or in support of their position against any
assessment.
All BIR Rulings issued prior to Jan 1, 1998 are not to be used by any BIR
action lawyer in issuing new rulings for request for rulings involving current
business transaction/s.
However, BIR Rulings issued prior to Jan 1, 1998 remains to be valid
but only:
a. To the taxpayer who was issued the ruling; and
b. Covering the specific transaction/s which is the subject of
the same ruling
BIR Rulings issued prior to Jan 1, 1998, shall remain valid as mentioned
above, unless expressly notified of its revocation or unless the legal basis
in law for such issuance has already been repealed/amended in the
current Tax Code.
5.
All concerned revenue officials and employees are hereby enjoined to give this
Circular as wide a publicity as possible.
Kim S. Jacinto-Henares
BIR Ruling No. 370-2011 (October 7, 2011)
(Just lifted this off from last sem. Dont worry I checked if mei kulang.)
Summary:
The case is about the PEACe bonds, and the tax to be imposed on the interest
income. In the 2001 BIR Rulings, they said that the bonds were exempt from the
20% Final tax. The 2001 Rulings interpreted the law incorrectly by saying that
since it was sold to any one entity it is not to be considered as deposited
substitutes and thus not to be charged a 20% Final Tax. This however was found
to be inaccurate as the law was found out to provide that these bonds are covered.
The interpretation of the phrase at ANY one time means the entire term of the
bond not just the original issuance. The 2001 Rulings were declared null and void
for adding an exemption that is not found in the law hence this ruling was given
retroactive effect. As a result, CODE-NGO must pay the present value of the
discount P4.86 B, because it did not pay upfront when it should have been
withheld upfront and paid at the time of issuance, they would have paid only P1.4
B. They cannot rely on the 2001 Rulings because they were in excess of what the
TAX CODE provides.
FACTS:
arising from the P34 billion worth of 10-year zero coupon treasury bonds
issued by the Bureau of Treasury (BTr) on October 18, 2001 Poverty
Eradication and Alleviation Certificates (PEACe Bonds)
Why the PEACe Bonds were issued
The net proceeds from the sale estimated to be at P1.45 billion will be used by
CODE-NGO to establish a fund that will finance anti-poverty projects of NGOs
nationwide.
The original plan did not happen because BTr questioned the propriety of
issuing the bonds directly to CODE-NGO, not being a Government Securities
Eligible Dealer (GSED). They wanted an auction and they wanted that CODENGO get a GSED to join.
BTr provided in the Public Offering of Treasury Bonds the tax treatment of the
PEACe Bonds WILL NOT BE SUBJECT TO 20% FINAL WITHHOLDING
TAX.
The tax treatment was based on 3 BIR rulings (2001 Rulings) issued before
the auction.
o May 31 supposedly the Bonds were to be issued to a single entity,
CODE-NGO, the Bonds were NOT considered to be public borrowing,
2
they were NOT considered deposit subsitutes as defined by the Tax
Code so not subject to the 20% final withholding tax.
o August 16 They are not deposit substitutes because of the fact of their
original issuance to a single entity. Construction of the phrase, at any one
time to mean the original issuance.
o September 29 confirmed the 2 above
Auction
Treasury
bond
as
explained
to
me.
The
Bureau
of
Treasury
will
sell
the
bonds
to
an
entity
like
a
bank
for
example
and
the
bank
will
then
sell
the
bonds
to
whoever
may
be
interested,
natural
or
juridical
persons
can
buy,
for
example
si
Corporation
A.
the
bonds
will
earn
interest
and
thats
how
it
attracts
buyers.
So
to
illustrate:
BTr
issues
P1
billion
worth
ng
treasury
bonds
issues
them
to
Bank
X
who
pays
a
discounted
amount
say
like
P750
million
Bank
X
will
now
be
able
to
issue
these
to
Corporation
A,
Investor
B,
etc.
Corporation
A
and
Investor
B
will
earn
money
as
the
bonds
earn
interest.
(Sana
im
making
sense)
In
addition,
these
are
described
as
risk-free
kapag
galing
sa
government
since
all
they
have
to
do
is
to
print
money.
2
Deposit
substitutes
the
borrowing
of
fund
must
be
obtained
from
20
or
more
individuals
or
corporate
lenders
at
any
one
time.
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RCBC was declared as the winning bidder lowest bid interest rate of 12.75%
for a total face value of P35 billion.
RCBC paid BTr P10.7 Billion for P 35 billion worth of treasury bonds, discount
of P24.3 billion.
RCBC sold the PEACe bonds to CODE-NGO. CODE-NGO sold it to RCBC
Capital for P12.1 billion = gain of P1.4 billion
The phrase at any one time is deemed to refer to the floatation of the debt
instrument or security.
In other words, since the actual number of bond holders or investors maybe at
maturity date of the financial instrument, more than 20 individuals or
corporation, the said direct lenders and indirect investors are deemed to be
what constitute public.
BIR also declared in another BIR Ruling that the tax due should be withheld
upfront.
ISSUES: Purisima raises the ff issues
1. W/N the interest income arising from PEACe Bonds shall be subject to the
20% Final Tax or, in the alternative, to Ordinary Income Tax 20% Final
Tax
2. How much is the tax due P4.86 billion (MAIN)
3. Who shall be liable to pay the tax due CODE-NGO
4. How will the tax be collected Withhold upfront
RATIO:
ISSUE 1: Subject to 20% Final Tax
The P24.3 billion discount on the issuance of the PEACe Bonds should be
subject to the 20% Final Tax on interest income from deposit substitutes.
Manner of payment DOF Department Order No. 141-95 this should have
been followed.
o Treasury Bonds, the 20% final income tax shall be withheld on
discounts valued at present value on every original sale. Periodic
coupon payments on Treasury Bonds shall be subject to the 20% final
income tax to be withheld at the time the coupon payments are made.
o PRESENT VALUED BY THE NET YIELD ON THE SECURITY TO
ENSURE THE INTEREST TAXED AT 20% TO BE PAID UPFRONT
However, at the time of the issuance of the PEACe Bonds in 2001, the BTr
was not able to collect the final tax on the discount realized by RCBC as a
result of the 2001 Rulings.
Subsequently, the issuance of the 2004 Ruling modified and superseded the
2001 Rulings by stating that the TAX CODE is clear that the term public
means borrowing from 20 or more lenders at ANY one time.
o The word ANY indicates that the period contemplated is the entire term
of the bond and not merely the point of origination issuance.
o The Tax Code provision is clear and there is no need for statutory
construction.
Thus, by taking the PEACe Bonds out of the ambit of deposits substitutes and
exempting it from the 20% Final Tax, an exemption in favour of the PEACe
Bonds was created when no such exemption is found in the law.
THE 2001 rulings are null and void and cannot be given any legal effect
for being contrary to law.
o It is basic principle of administrative law that the interpretation given
by an administrative agency cannot run contrary to the law which it
seeks to implement.
o Administrative rules and regulations are intended to carry out,
neither to supplant nor to modify, the law.
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11
RCBC should have paid upon issuance and it would have paid only P1.4B,
20% of the value as of October 18, 2001.
o Since they did not pay they will have to pay now the present value of the
original discount P4.86B. (So basically, this ruling was given
retroactive effect)
BTr shall withhold the FINAL TAX due on the interest income derived from the
PEACe Bonds prior to its payment on the date of maturity.
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12