Article 5p. 5

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

surveillance if there is reason to believe that such person

is not declaring his correct income, sales or receipts for

internal revenue tax purposes. The findings may be used

as the basis for assessing the taxes for the other months

or quarters of the same or different taxable years and

such assessment shall be deemed prima facie correct.

When it is found that a person has failed to issue receipts

and invoices in violation of the requirements of Sections

113 and 237 of this Code, or when there is reason to believe

that the books of accounts or other records do not

correctly reflect the declarations made or to be made in a

return required to be filed under the provisions of this

Code, the Commissioner, after taking into account the

sales, receipts, income or other taxable base of other

persons engaged in similar businesses under similar

situations or circumstances or after considering other

relevant information may prescribe a minimum amount

of such gross receipts, sales and taxable base, and such

amount so prescribed shall be prima facie correct for

purposes

of

determining

the

internal

revenue

tax

liabilities of such person.

(D) Authority to Terminate Taxable Period. - When it

shall come to the knowledge of the Commissioner that a

taxpayer is retiring from business subject to tax, or is

intending to leave the Philippines or to remove his

property therefrom or to hide or conceal his property, or

is

performing

any

act

tending

to

obstruct

the

proceedings for the collection of the tax for the past or

current quarter or year or to render the same totally or

partly ineffective unless such proceedings are begun

immediately, the Commissioner shall declare the tax

period of such taxpayer terminated at any time and shall

send the taxpayer a notice of such decision, together with

a request for the immediate payment of the tax for the

period

so

declared

terminated and the tax for the

preceding year or quarter, or such portion thereof as may

be unpaid, and said taxes shall be due and payable

immediately and shall be subject to all the penalties

hereafter prescribed, unless paid within the time fixed in

the demand made by the Commissioner.

(E) Authority of the Commissioner to Prescribe Real

Property

Values.

-

The

Commissioner

is

hereby

authorized to divide the Philippines into different zones

or areas and shall, upon mandatory consultation with

competent appraisers both from the private and public

sectors,

and with prior notice to affected taxpayers,

determine the fair market value of real properties located

in each zone or area, subject to automatic adjustment

once every three (3) years through rules and regulations

issued by the Secretary of Finance based on the current

Philippine

valuation

standards:

Provided,

That

no

adjustment

in

zonal

valuation

shall

be valid unless

published in a newspaper of general circulation in the

province,

city

or

municipality

concerned,

or

in

the

absence thereof, shall be posted in the provincial capitol,

city or municipal hall and in two (2) other conspicuous

public places therein: Provided, further, That the basis of

any valuation, including the records of consultations

done, shall be public records open to the inquiry of any

taxpayer. For purposes of computing any internal revenue

tax, the value of the property shall be, whichever is the

higher of:

(1)

the

fair

market

value

as

determined

by

the

Commissioner; or

(2) the fair market value as shown in the schedule of

values of the Provincial and City Assessors.

(as amended by RA No 10963)

(F) Authority of the Commissioner to Inquire into Bank

Deposit Accounts and Other Related information held

by

Financial

Institutions.

[4]

-

Notwithstanding

any

contrary provision of Republic Act No. 1405, Republic Act

No. 6426, otherwise known as the Foreign Currency

Deposit Act of the Philippines, and other general or

special laws, the Commissioner is hereby authorized to

inquire

into

the

bank

deposits

and

other

related

information held by financial institutions of:

(1) A decedent to determine his gross estate; and

(2) Any taxpayer who has filed an application for

compromise

of

his

tax

liability

under

Section

204(A)(2)

of

this

Code

by

reason

of

financial

incapacity to pay his tax liability.

In

case

a

taxpayer

files

an

application

to

compromise the payment of his tax liabilities on his

claim that his financial position demonstrates a

clear inability to pay the tax assessed, his application

shall not be considered unless and until he waives in

writing his privilege under Republic Act No. 1405,

Republic Act No. 6426, otherwise known as the

Foreign Currency Deposit Act of the Philippines, or

under other general or special laws, and such waiver

shall constitute the authority of the Commissioner to

inquire into the bank deposits of the taxpayer.

(3) A specific taxpayer or taxpayers subject of a

request for the supply of tax information from a

foreign tax authority pursuant to an international

convention or agreement on tax matters to which

the Philippines is a signatory or a party of: Provided,

That the information obtained from the banks and

other financial institutions may be used by the

Bureau of Internal Revenue for tax assessment,

verification, audit and enforcement purposes.

In case of a request from a foreign tax authority for

tax

information

held

by

banks

and

financial

institutions, the exchange of information shall be

done in a secure manner to ensure confidentiality

thereof under such rules and regulations as may be

promulgated by the Secretary of Finance, upon

recommendation of the Commissioner.

The Commissioner shall provide the tax information

obtained

from

banks

and

financial

institutions

pursuant

to

a

convention

or

agreement

upon

request of the foreign tax authority when such

requesting foreign tax authority has provided the

following

information

to

demonstrate

the

foreseeable relevance of the information to the

request:

(a) The identity of the person under examination or

investigation;

(b) A statement of the information being sought,

including its nature and the form in which the said

foreign

tax

authority

prefers

to

receive

the

information from the Commissioner;

(c) The tax purpose for which the information is

being sought;

(d)

Grounds

for

believing

that

the

information

requested is held in the Philippines or is in the

possession

or

control

of

a

person

within

the

jurisdiction of the Philippines;

(e) To the extent known, the name and address of

any person believed to be in possession of the

requested information;

(f) A statement that the request is in conformity with

the law and administrative practices of the said

foreign tax authority, such that if the requested

information was within the jurisdiction of the said

foreign tax authority then it would be able to obtain

the information under its laws or in the normal

course of administrative practice and that it is in

conformity

with

a

convention

or

international

agreement; and

(g) A statement that the requesting foreign tax

authority has exhausted all means available in its

own territory to obtain the information, except those

that would give rise to disproportionate difficulties.

The

Commissioner

shall

forward

the

information as

promptly

as

possible

to

the

requesting

foreign tax

authority.

To

ensure

a

prompt

response,

the

Commissioner

shall

confirm

receipt of a request in

writing to the requesting tax authority and shall notify

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