Title IX, Chapter III – Rules and Regulations

SECTION 244.  Authority of Secretary of Finance to Promulgate Rules and Regulations. – The Secretary of Finance, upon recommendation of the Commissioner, shall promulgate all needful rules and regulations for the effective enforcement of the provisions of this Code.

SECTION 245.  Specific Provisions to be Contained in Rules and Regulations. – The rules and regulations of the Bureau of Internal Revenue shall, among other things, contain provisions specifying, prescribing or defining:

(a)        The time and manner in which Revenue Regional Directors shall canvass their respective Revenue Regions for the purpose of discovering persons and property liable to national internal revenue taxes, and the manner in which their lists and records of taxable persons and taxable objects shall be made and kept;

(b)       The forms of labels, brands or marks to be required on goods subject to an excise tax, and the manner in which the labeling, branding or marking shall be effected;

(c)        The conditions under which and the manner in which goods intended for export, which if not exported would be subject to an excise tax, shall be labelled, branded or marked;

(d)       The conditions to be observed by revenue officers respecting the institutions and conduct of legal actions and proceedings;

(e)        The conditions under which goods intended for storage in bonded warehouses shall be conveyed thither, their manner of storage and the method of keeping the entries and records in connection therewith, also the books to be kept by Revenue Inspectors and the reports to be made by them in connection with their supervision of such houses;

(f)        The conditions under which denatured alcohol may be removed and dealt in, the character and quantity of the denaturing material to be used, the manner in which the process of denaturing shall be effected, so as to render the alcohol suitably denatured and unfit for oral intake, the bonds to be given, the books and records to be kept, the entries to be made therein, the reports to be made to the Commissioner, and the signs to be displayed in the business or by the person for whom such denaturing is done or by whom, such alcohol is dealt in;

(g)        The manner in which revenue shall be collected and paid, the instrument, document or object to which revenue stamps shall be affixed, the mode of cancellation of the same, the manner in which the proper books, records, invoices and other papers shall be kept and entries therein made by the person subject to the tax, as well as the manner in which licenses and stamps shall be gathered up and returned after serving their purposes;

(h)       The conditions to be observed by revenue officers respecting the enforcement of Title III imposing a tax on state of a decedent, and other transfers mortis causa, as well as on gifts  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 the 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 purposes 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 an 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.

SECTION 246.  Non-Retroactivity of Rulings. – Any revocation, modification or reversal of any of the  rules and regulations promulgated in accordance with the preceding Sections or any of the rulings or circulars promulgated by the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be prejudicial to the taxpayers, except in the following cases:

(a)        Where the taxpayer deliberately misstates or omits material facts from his return or any document required of him by the Bureau of Internal Revenue;

(b)       Where the facts subsequently gathered by the Bureau of Internal revenue are materially different from the facts on which the ruling is based; or

(c)        Where the taxpayer acted in bad faith.

(Manual encoding credits: Magdaleno Abdon, Sept. 2020)