Article 32p. 32

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

against the income tax liability of the taxpayer for the

taxable year: Provided, That, beginning January 1, 2019,

the rate of withholding shall not be less than one percent

(1%) but not more than fifteen percent (15%) of the

income payment. (as amended by RA No 10963)

(C) Tax-free Covenant Bonds. - In any case where bonds,

mortgages, deeds of trust or other similar obligations of

domestic or resident foreign corporations, contain a

contract or provisions by which the obligor agrees to pay

any portion of the tax imposed in this Title upon the

obligee or to reimburse the obligee for any portion of the

tax or to pay the interest without deduction for any tax

which the obligor may be required or permitted to pay

thereon or to retain therefrom under any law of the

Philippines, or any state or country, the obligor shall

deduct

bonds,

mortgages,

deeds

of

trust

or

other

obligations, whether the interest or other payments are

payable annually or at shorter or longer periods, and

whether the bonds, securities or obligations had been or

will be issued or marketed, and the interest or other

payment thereon paid, within or without the Philippines,

if

the

interest

or

other

payment

is

payable

to

a

nonresident alien or to a citizen or resident of the

Philippines.

SEC. 58. Returns and Payment of Taxes Withheld at

Source. -

(A) Quarterly Returns and Payments of Taxes Withheld.

- Taxes deducted and withheld under Section 57 by

withholding agents shall be covered by a return and paid

to, except in cases where the Commissioner otherwise

permits, an authorized agent bank, Revenue District

Officer, Collection Agent, or duly authorized Treasurer of

the city or municipality where the withholding agent has

his legal residence or principal place of business, or where

the

withholding

agent

is

a

corporation,

where

the

principal office is located.

The taxes deducted and withheld by the withholding

agent shall be held as a special fund in trust for the

government until paid to the collecting officers.

The return for final and creditable withholding taxes shall

be filed and the payment made not later than the last

day of the month following the close of the quarter

during which the withholding was made. (as amended

by RA No 10963)

(B) Statement of Income Payments Made and Taxes

Withheld. - Every withholding agent required to deduct

and withhold taxes under Section 57 shall furnish each

recipient, in respect to his or its receipts during the

calendar quarter or year, a written statement showing the

income or other payments made by the withholding

agent during such quarter or year, and the amount of the

tax deducted and withheld therefrom, simultaneously

upon payment at the request of the payee, but not later

than the twentieth (20th) day following the close of the

quarter in the case of corporate payee, or not later than

March 1 of the following year in the case of individual

payee

for

creditable

withholding

taxes.

For

final

withholding taxes, the statement should be given to the

payee on or before January 31 of the succeeding year.

(C) Annual Information Return. - Every withholding

agent required to deduct and withhold taxes under

Section 57 shall submit to the Commissioner an annual

information return containing the list of payees and

income payments, amount of taxes withheld from each

payee and such other pertinent information as may be

required

by the Commissioner. In the case of final

withholding taxes, the return shall be filed on or before

January 31 of the succeeding year, and for creditable

withholding taxes, not later than March 1 of the year

following the year for which the annual report is being

submitted. This return, if made and filed in accordance

with the rules and regulations approved by the Secretary

of Finance, upon recommendation of the Commissioner,

shall be sufficient compliance with the requirements of

Section 68 of this Title in respect to the income payments.

The Commissioner may, by rules and regulations, grant to

any withholding agent a reasonable extension of time to

furnish and submit the return required in this Subsection.

(D) Income of Recipient. - Income upon which any

creditable tax is required to be withheld at source under

Section 57 shall be included in the return of its recipient

but the excess of the amount of tax so withheld over the

tax due on his return shall be refunded to him subject to

the provisions of Section 204; if the income tax collected

at source is less than the tax due on his return, the

difference shall be paid in accordance with the provisions

of Section 56.

All taxes withheld pursuant to the provisions of this Code

and its implementing rules and regulations are hereby

considered trust funds and shall be maintained in a

separate account and not commingled with any other

funds of the withholding agent.

(E)

Registration

with

Register

of

Deeds.

-

No

registration of any document transferring real property

shall be effected by the Register of Deeds unless the

Commissioner or his duly authorized representative has

certified that such transfer has been reported, and the

capital gains or creditable withholding tax, if any, has

been paid: Provided, however, That the information as

may

be

required

by

rules

and

regulations

to

be

prescribed

by

the

Secretary

of

Finance,

upon

recommendation

of

the

Commissioner,

shall

be

annotated by the Register of Deeds in the Transfer

Certificate of Title or Condominium Certificate of Title:

Provided, further, That in cases of transfer of property to a

corporation,

pursuant

to

a

merger,

consolidation or

reorganization,

and

where

the

law

allows

deferred

recognition of income in accordance with Section 40, the

information as may be required by rules and regulations

to be prescribed by the Secretary of Finance, upon

recommendation

of

the

Commissioner,

shall

be

annotated by the Register of Deeds at the back of the

Transfer Certificate of Title or Condominium Certificate of

Title of the real property involved: Provided, finally, That

any violation of this provision by the Register of Deeds

shall be subject to the penalties imposed under Section

269 of this Code.

SEC. 59. Tax on Profits Collectible from Owner or Other

Persons. - The tax imposed under this Title upon gains,

profits, and income not falling under the foregoing and

not returned and paid by virtue of the foregoing or as

otherwise provided by law shall be assessed by personal

return under rules and regulations to be prescribed by

the Secretary of Finance, upon recommendation of the

Commissioner. The intent and purpose of the Title is that

all gains, profits and income of a taxable class, as defined

in this Title, shall be charged and assessed with the

corresponding tax prescribed by this Title, and said tax

shall be paid by the owners of such gains, profits and

income, or the proper person having the receipt, custody,

control or disposal of the same. For purposes of this Title,

ownership of such gains, profits and income or liability to

pay the tax shall be determined as of the year for which a

return is required to be rendered.

CHAPTER X ESTATES AND TRUSTS

SEC. 60. Imposition of Tax. -

(A) Application of Tax. - The tax imposed by this Title

upon individuals shall apply to the income of estates or of

any kind of property held in trust, including:

(1) Income accumulated in trust for the benefit of

unborn or unascertained person or persons with

contingent interests, and income accumulated or

held for future distribution under the terms of the

will or trust;

(2) Income which is to be distributed currently by

the

fiduciary

to

the

beneficiaries,

and

income

collected by a guardian of an infant which is to be

held or distributed as the court may direct;

© Compiled by RGL

32 of 201