Printing of Receipts or Sales or Commercial Invoices

February 20, 1978

REVENUE REGULATIONS NO. 02-78

SUBJECT : Printing of Receipts or Sales or Commercial Invoices

TO : All Internal Revenue Officers and Others Concerned

Pursuant to the provisions of P.D. 1255 in relation to Section 326 and Section 4 of the National Internal Revenue Code of 1977, as amended, these regulations are hereby promulgated:

SECTION 1. Scope. — These regulations shall govern the printing of receipts or sales or commercial invoices; the issuance of authority to print; and the quarterly report of printers.

SECTION 2. Definition of Terms. — For purposes of these regulations, the following definition of terms is hereby adopted:

a) "Printer" is any person, whether natural or juridical, engaged in the process or business of producing any printed matter.

b) "Receipt" is a written admission or acknowledgment of the fact of payment in money or other settlement between seller and buyer of goods, debtor and creditor, or person rendering services and client or customer. 

c) "Sales or commercial invoice" is a written account of goods sold or services rendered and the prices charged therefor, or a list of goods consigned and the value at which the consignee is to receive them or any other list by whatever name it is known which is used in the ordinary course of business evidencing sale and transfer or agreement to sell or transfer goods and services, e.g. purchase orders; job orders; provisional and temporary receipts, etc.; except — (1) freight stub receipts; (2) passage tickets; and (3) amusement tickets and other similar receipts which are governed by Revenue Regulations No. V-1, as amended.

SECTION 3. Prior Approval and Registration of Books of Accounts, Registers, Records, Invoices and Receipts. — Section 19 of Revenue Regulations V-1, as amended, shall read as follows:

Section 19. AUTHENTICATION AND REGISTRATION OF BOOK, REGISTER OR RECORD; AUTHORITY TO PRINT RECEIPTS, SALES OR COMMERCIAL INVOICES; AND REGISTRATION AND STAMPING OF RECEIPTS AND INVOICES.

a) IN GENERAL. — Persons required to keep books of accounts, internal revenue books, records of receipts and disbursements, additional registers and other records, invoices and receipts for recording their transactions as prescribed in these regulations, shall before using any of the aforesaid books, records, registers, invoices and receipts first present them to the REVENUE DISTRICT OFFICER WHERE HIS PRINCIPAL PLACE OF BUSINESS IS LOCATED for approval and registration.

A register book for every book, register or records which has been approved shall be kept showing such information as the date of approval; the name and address of the taxpayer; his citizenship; the number of the alien registration certificate, if an alien; the kind of business and TAX NUMERIC CODE NUMBER and number of privilege tax receipt issued for the business, if any; and the kind, volume, number of pages or sheets of the book, register or record. Every book, register or record so approved and registered shall be serially numbered for each taxpayer.

b) AUTHENTICATION AND REGISTRATION OF BOOK, REGISTER OR RECORD. — Before any book, register, or record is presented for registration, there shall be placed on the front cover by the owner thereof an identification as to the kind of book, register, or record, the name and business address of the owner, citizenship, the number of the alien registration certificate, if an alien, the kind of business engaged in, and TAX NUMERIC CODE NUMBER and number of the privilege tax receipt issued for the business. 

If a book, register, or record is approved, the following authentication shall be made by the approving officer on the reverse side of the front cover thereof: aisa dc

"This ______, Volume No. _____ with _____ pages or sheets, is approved on this _____ day of _____, 19 ___ for purposes of Revenue Regulations No. _____.

(Signature)

(Designation of Officer)"

If the book, register, or records presented for approval is a continuation of previous books, register, or records, besides the foregoing authentication, the following notation shall be added to the authentication:

"Volume No. _____ of this was approved on the _____ day of _____, 19 _____.

(Signature)

(Designation of Officer)"

c) AUTHORITY TO PRINT RECEIPTS, SALES OR COMMERCIAL INVOICES. — BEFORE PRINTING ANY RECEIPT OR SALES OR COMMERCIAL INVOICE, THE PRINTER SHALL FILE AN APPLICATION FOR AUTHORITY TO PRINT (BIR FORM NO. ______ HERETO ATTACHED AS ANNEX "A") WITH THE REVENUE DISTRICT OFFICER WHERE THE PRINCIPAL PLACE OF BUSINESS OF THE PRINTER IS LOCATED, FOR APPROVAL THEREOF. THE SAME SHALL BE ACCOMPLISHED IN QUADRUPLICATE BY THE PRINTER, DULY ATTESTED TO BY THE TAXPAYER AND SHALL BE ACCOMPANIED BY FOUR (4) DRAFT COPIES OF THE RECEIPTS OR INVOICES TO BE PRINTED AS WELL AS THE JOB ORDER ISSUED BY THE PRINTER TO THE TAXPAYER. IN CASE OF LOOSE LEAF INVOICES OR RECEIPTS THE PRINTER IS FURTHER REQUIRED TO ATTACH A COPY OF THE APPROVED PERMIT OF THE TAXPAYER TO USE SAID LOOSE LEAF.

UPON APPROVAL, THE ORIGINAL COPY OF SAID AUTHORITY TO PRINT SHALL BE RETAINED BY THE PRINTER, THE DUPLICATE FURNISHED THE TAXPAYER FOR PURPOSES OF THE REGISTRATION OF THE PRINTED RECEIPTS OR INVOICES, TRIPLICATE FOR TAXPAYER'S FILE COPY, AND THE QUADRUPLICATE RETAINED BY THE REVENUE DISTRICT OFFICER ISSUING THE AUTHORITY TO PRINT.

1. ISSUING OFFICER OF AUTHORITY TO PRINT RECEIPTS OR INVOICES. — THE REVENUE DISTRICT OFFICER OF THE PRINCIPAL PLACE OF BUSINESS OF THE PRINTER IS THE ISSUING OFFICER OF THE AUTHORITY TO PRINT RECEIPTS OR INVOICES. THE SAID OFFICER IS HEREBY REQUIRED — 

1.1. TO KEEP A SEPARATE FILE OF APPROVED AUTHORITIES TO PRINT; AND

1.2 TO KEEP A REGISTER BOOK OF APPROVED AUTHORITIES TO PRINT WHICH SHALL CONTAIN THE FOLLOWING DATA:

a) NAME, BUSINESS ADDRESS, TAN AND PTR OF PRINTER;

b) NAME AND BUSINESS ADDRESS OF TAXPAYER FOR WHOM AUTHORITY TO PRINT WAS SECURED; AND

c) AUTHORITY NUMBER AND DATE OF ISSUANCE.

2. QUARTERLY REPORT OF PRINTER. — WITHIN TWENTY (20) DAYS AFTER THE END OF EVERY CALENDAR QUARTER, THE PRINTER SHALL, UNDER THE PENALTY OF PERJURY, SUBMIT TO THE REVENUE DISTRICT OFFICER FROM WHOM AUTHORITY TO PRINT RECEIPTS OR INVOICES WAS SECURED, A QUARTERLY REPORT, ACCOMPLISHED IN TRIPLICATE. (BIR FORM NO. _____ HERETO ATTACHED AS ANNEX "B")

3. OTHER REQUIREMENTS. — 

1. EVERY COPY OF INVOICE OR RECEIPT APPROVED FOR PRINTING UNDER THESE REGULATIONS SHALL BEAR ON THE ORIGINAL AND EVERY COPY THEREOF ON ITS LOWER LEFT HAND CORNER THE NAME, BUSINESS ADDRESS, AND AUTHORITY NUMBER OF THE PRINTER.

2. IN THE CASE OF RECEIPTS OR INVOICES PRINTED AND REGISTERED PRIOR TO THE EFFECTIVITY OF THESE REGULATIONS, THE SAME MAY STILL BE USED, PROVIDED THE TAXPAYER COMPLIES WITH THE FOLLOWING:

a) SUBMIT TO THE REVENUE DISTRICT OFFICER WHERE HIS PRINCIPAL PLACE OF BUSINESS IS LOCATED AN INVENTORY OF UNUSED RECEIPTS OR INVOICES WITHIN THIRTY (30) DAYS AFTER THE DATE OF EFFECTIVITY OF THESE REGULATIONS. 

SAID INVENTORY SHALL BE ACCOMPANIED BY A COPY OF THE PREVIOUSLY APPROVED PERMIT FOR REGISTRATION OF SUCH RECEIPTS OR INVOICES; AND

b) THE UNUSED RECEIPTS OR INVOICES REFERRED TO IN THE PRECEDING PARAGRAPH SHALL, AT THE TIME OF SUBMISSION OF THE REQUIRED INVENTORY, BE PRESENTED TO THE SAME REVENUE DISTRICT OFFICER FOR APPROPRIATE RESTAMPING.

FAILURE OF THE TAXPAYER TO COMPLY WITH THESE REQUIREMENTS SHALL RENDER THE UNUSED RECEIPTS OR INVOICES INVALID AND THE POSSESSION OR USE THEREOF AFTER THE LAPSE OF THIRTY (30) DAYS FROM THE EFFECTIVITY OF THESE REGULATIONS SHALL BE PUNISHABLE UNDER THE PROVISIONS OF PRESIDENTIAL DECREE NO. 1254.

d) REGISTRATION AND STAMPING OF RECEIPTS AND INVOICES — BEFORE BEING USED, THE PRINTED RECEIPTS, SALES OR COMMERCIAL INVOICES SHALL BE REGISTERED WITH THE REVENUE DISTRICT OFFICER WHERE THE PRINCIPAL PLACE OF BUSINESS OF THE TAXPAYER IS LOCATED WITHIN THIRTY (30) DAYS FROM THE DATE OF THE INVOICE ISSUED BY THE PRINTER. THE REGISTRATION OF THE PRINTED RECEIPTS OR INVOICES SHALL BE EVIDENCED BY AN APPROPRIATE STAMP ON THE FACE OF THE TAXPAYER'S COPY OF THE AUTHORITY TO PRINT AS WELL AS ON THE FRONT COVER, ON THE BACK OF THE MIDDLE PAGE AND ON THE BACK OF THE LAST INVOICE OR RECEIPT OF THE REGISTERED BOOKLET OR PAD, AUTHENTICATED BY THE SIGNATURE OF THE OFFICER AUTHORIZED TO PLACE THE STAMP THEREON.

SECTION 4. Penalties. — For unlawful acts or omissions in violation of Sec. 216-A the same shall be penalized under Sec. 220-A of the Tax Code of 1977.

SECTION 5. Repealing Clause. — All regulations, rules, orders or portions thereof contrary to or inconsistent with the provisions of these regulations are hereby modified and/or repealed accordingly.

SECTION 6. Effectivity. — These regulations shall take effect thirty (30) days after its publication in the Official Gazette.

CESAR VIRATA
Secretary

Recommended by:

EFREN I. PLANA
Acting Commissioner of Internal Revenue
TAN P4519-F2828-A-8

Amendment to Bookkeeping Regulations

July 31, 1978

REVENUE REGULATIONS NO. 12-78

SUBJECT : Implementing Regulations to Section 216 of the National Internal Revenue Code of 1977, as Amended, by Presidential Decree No. 1457; and Further Amending the Pertinent Provisions of Revenue Regulations V-1, Otherwise Known as the Bookkeeping Regulations

TO : All Internal Revenue Officers and Others Concerned

Pursuant to the provisions of Presidential Decree No. 1457 in relation to Section 326 and Section 4 of the National Internal Revenue Code of 1977, as amended, these regulations are hereby promulgated.  

SECTION 1. Scope. — These regulations shall govern the issuance of receipts or sales or commercial invoices.

SECTION 2. Definition of Terms. — For purposes of these regulations, the following terms shall be taken to mean as follows:  
1. The term "receipt(s)" means a written admission or acknowledgment of the fact of payment in money or other settlement between seller and buyer of goods, debtor and creditor, or persons rendering services and client or customers.
2. The term "sales or commercial invoice(s)" shall mean a written account of goods sold or services rendered and the price charged therefor, or a list of goods consigned and the value at which the consignee is to receive them or any other list by whatever name it is known which is used in the ordinary course of business evidencing any transaction, sale and/or transfer of goods and/or services.  

SECTION 3. Invoices or Receipts. — Chapter IV of Revenue Regulations V-1, as amended, shall read as follows:

Chapter IV

Receipts or Sales or Commercial Invoices

Persons subject to tax to issue Receipts or Sales or Commercial Invoices; Contents of Registered Receipts or Invoices. All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at five pesos or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of the transaction, quantity, unit cost and description of merchandise or nature of service: Provided, that in the case of sales, receipts or transfers in the amount of one hundred pesos or more, or, regardless of amount, where the sale or transfer is made by producers, manufactures, importers, wholesalers, or where the receipt is issued to cover payment made as rentals, commissions, compensations or fees, the receipts or invoices shall further show the name, business style, if any, and address of the purchaser, customer, or client. The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of five years from the date of the invoice or receipt, the duplicate shall be kept and preserved by the issuer, also in his place of business for a like period: Provided, that persons subject to tax, whose gross sales, earnings or receipts during the last preceding year exceed thirty thousand pesos shall, for each sale or transaction, issue a receipt or an invoice, irrespective of the value of the article sold or service rendered.  

The Commissioner of Internal Revenue may, in meritorious cases, exempt any person subject to an internal revenue tax from compliance with the provisions of this section. In any event, market vendors selling exclusively domestic meat, fruits, vegetables, games, poultry, fish and other food products are hereby exempted from the provisions of this section.  

The provisions of this section, together with the penal provisions in Presidential Decree No. 1254 shall be posted in a prominent place in the establishment covered by the requirements thereof. (Sec. 216, NIRC of 1977, as amended by P.D. 1457).

SECTION 4. Vouchers for Transactions; Issuance of Receipts or Sales or Commercial Invoices. — Section 14 of Revenue Regulations V-1, as amended, shall read as follows:

Section 14. Source Document of Transactions; Issuance of Receipts or Sales or Commercial Invoices.
a) In General. Persons subject to an internal revenue tax who are required to keep the books of accounts mentioned in Section 321 of the National Internal Revenue Code of 1977, as amended, shall have a voucher for each entry in their books. The voucher may be an invoice, receipt, check or other documents which shall show the details of each transaction.  
b) Persons Required to Issue Receipts or Sales or Commercial Invoices:
1) Those whose sales or transfers of merchandise or whose services rendered are valued at five pesos or more;  
2.) Those whose sales or transfers of merchandise or whose services rendered are valued at one hundred pesos or more (plus the additional requirement of indicating thereon the name, business style and address of the purchaser, customer or client).
3) Those who receive payment made as rentals, commissions, compensations or fees, regardless of amount received (plus the additional requirement of indicating thereon the name, business style and address of customer or client);  
4) Producers, manufacturers, importers, wholesalers, regardless of amount of sale or transfer made (plus the additional requirement of indicating thereon the name, business style and address of customer or client);
5) Those whose gross sales, earnings or receipts during the last preceding year exceed thirty thousand pesos, irrespective of the amount involved.  

c) Persons Not Required to Issue Receipts, Sales or Commercial Invoices:

1) Those whose sales or transfers of merchandise or for services rendered are valued below five pesos, provided, their gross sales, earnings or receipts during the last preceding year do not exceed thirty thousand pesos. (In case the transaction is valued at less than five pesos, a receipt or invoice need not be issued, but unless it is issued, the transaction must be recorded immediately at the time it is effected in a registered petty cash book, the entries in which shall be summarized at the end of the day and the total thereof transferred on the same day to a sales receipt or invoice clearly indicating thereon that the same is the "petty sales for the day.");  

2) Those exempted by the Commissioner of Internal Revenue;

3) Market vendors selling exclusively domestic meat, fruits, vegetables, games, poultry, fish and other food products.  

d) Documentation and Substantiation of Transactions. — Every purchase or expenditure by a taxpayer subject to these regulations shall be duly supported by a receipt or invoice issued by the vendor or the person rendering the service in accordance with Section 15 of these regulations, should any of the receipts or invoices lack any of the information required to be indicated therein, such receipts or invoices shall be deemed inadequate for documentation or substantiation of the particular transaction. However, in case no receipt or invoice was issued by the vendor or the person rendering the service for the reason that he is exempt from the requirement to issue the same, the purchaser, customer or client may require the vendor or the person rendering the service to sign a purchase or expense voucher indicating his name, address and business style, if any; and shall show the name and address of the purchaser, customer or client, date when the transaction was effected, quantity, unit cost and description of transaction, merchandise or nature of the service rendered, as the case may be.

SECTION 5. Form and Manner of Issuance of Receipts or Sales or Commercial Invoices. — Section 15 of Revenue Regulations V-1, as amended, shall read as follows:  

Section 15. Form, Time and Manner of Issuance of Receipts or Sales or Commercial Invoices.  
a) Form. — Receipts or Sales or Commercial Invoices must be serially numbered and made at least in duplicate. They may have as many duplicate copies as may be necessary for the purposes of the taxpayer using the same, but the duplicate copies shall bear the same serial number as the original. They shall be bound in 50's to 100's per book or pad and shall show among other things the name, business style, if any, taxpayer account number and business address of the person or entity using the same; and shall further bear on the original and every copy thereof, on the lower left hand corner the name of the printer and the number of his authority to print. They shall contain such spaces or lines and columns, as may be necessary and appropriate for the business of the taxpayer concerned.
b) Time and Manner of Issuance. — Where the transaction is required to be covered by a receipt or invoice, the same shall be prepared at least in duplicate and issued at the time the transaction is effected, showing the date of the transaction, quantity, unit cost, description of the transaction, merchandise or nature of the service rendered for which payment is received, e.g. rentals, commissions, fees, etc., and total value of the transaction.  

SECTION 6. Repealing Clause. — All rules and regulations contrary to or inconsistent herewith are hereby repealed or amended accordingly.

SECTION 7. Effectivity. — These regulations shall take effect thirty days after its publication in the Official Gazette.  

(SGD.) PEDRO M. ALMANZOR
Acting Minister of Finance

RECOMMENDED BY:
(SGD.) EFREN I. PLANA
Acting Commissioner of Internal Revenue
TAN: P4519-F2828-A-8

REVENUE REGULATIONS NO. 01-68 -Private Retirement Benefit Plan Regulations

March 25, 1968

REVENUE REGULATIONS NO. 01-68

SUBJECT : Private Retirement Benefit Plan Regulations

TO : All Internal Revenue Officers and Others Concerned

Pursuant to Section 79 (B) of the Revised Administrative Code, the following regulations are hereby promulgated prescribing the terms and conditions under which a qualified employee benefit plan may avail of the tax exemption provided by Republic Act No. 4917 and the application of the other provisions of said law. These regulations shall be known as the "Private Retirement Benefit Plan Regulations."

SECTION 1. Scope. — Republic Act No. 4917 exempts from all taxes the retirement benefits received by officials and employees of private firms under a reasonable private benefit plan maintained by the employer and all amounts received by such officials and employees from their employers on account of involuntary separation, such as death, sickness, or physical disability, or any other cause beyond the control of said officials and employees.

In order to avail of the exemption, with respect to retirement benefits, the following requirements must be met:

(a) The plan must be reasonable;
(b) The retiring official or employee must have been in the service of the same employer for at least 10 years and is not less than 50 years of age at the time of retirement; and
(c) The retiring official or employee shall not have previously availed of the privilege under a retirement benefit plan of the same or another employer.

A reasonable benefit plan may consist of a pension, gratuity, stock bonus or profit-sharing plan maintained by an employer for the benefit of some or all of his officials and employees, wherein contributions are made by such employer or officials and employees, or both. It may be contributory or non-contributory on the part of the officials or employees.

SECTION 2. Requisites of a Reasonable Retirement Benefit Plan:

(a) Written Program. — It must be a definite written program setting forth all provisions essential for qualification;
(b) Permanency. — It must be a permanent and continuing program unless sooner terminated by virtue of a valid business reason;
(c) Coverage. —

(1) Percentage Basis. — It must cover at least 70% of all officials and employees. If the plan provides eligibility requirements and at least 70% of all officials and employees meet the eligibility requirements, at least 80% of those eligible must be covered. Under this basis, the following employees are excluded:
(a) Employees who have been employed less than the minimum length of time stated in the plan;
(b) Employees who work 20 hours a week or less; and
(c) Seasonal employees who work 5 months a year or less.

(2) Classification Basis. — If the employee does not wish to cover the greater portion of his employees, he may set up a plan under a classification set-up prescribed by him and limit coverage to employees in a certain classification, over a prescribed age, employed for a stated number of years; etc. provided that the coverage of the plan must not discriminate in favor of officers, shareholders, supervisors, or highly compensated employees. A classification shall not be considered discriminatory merely because it is limited to salaried or clerical employees. Neither shall a plan be considered discriminatory merely because the contributions or benefits of or on behalf of the employees under the plan bear a uniform relationship to the total compensation, or the basis or regular rate of compensation, and the employees' length of service. cdta

(d) Contribution. — The employer, or officials and employees, or both, shall contribute to a trust fund for the purpose of distributing to the officials and employees or their beneficiaries, the corpus and income of the fund accumulated by the trust in accordance with the plan.

(e) Impossibility of Diversion. — The corpus or income of the trust fund must at no time be used for, or diverted to, any purpose other than for the exclusive benefit of the said officials and employees.

(f) Non-discriminatory. — There must be no discrimination in contributions or benefits in favor of officials and employees who are officers, shareholders, supervisors, or highly compensated.

(g) Non-forfeitures. — It must provide for non-forfeitable rights, that is upon the termination of the plan or upon the complete discontinuance of contributions under the plan, the rights of each official or employee to benefits accrued to the date of such termination or discontinuance, to the extent then funded, or the rights of each employee to the amounts credited to his account at such time are non-forfeitable.

(h) Forfeitures. — The plan must expressly provide that forfeitures arising from severance of employment, death or for any other reason, must not be applied to increase the benefits any employee would otherwise receive under the plan at any time prior to the termination of the plan at the complete discontinuance or employer contributions thereunder. The amounts so forfeited must be used as soon as possible to reduce the employer's contributions under the plan.

(i) Trust. — The retirement fund shall be administered by a trust.

SECTION 3. Involuntary Separation. — All amounts received by officials and employees, or their heirs upon separation from the service of the employer by reason of death, sickness or other physical disability or for any cause beyond the control of said officials or employees are also exempt from all terms and from attachment, garnishment, levy or seizure except to pay a debt of the official or employees concerned arising from liability imposed in a criminal action.

In contradistinction to the qualification for exemption under a qualified plan, the exemption under an involuntary separation is not qualified as to the length of service and age of the official or employee. Therefore, amounts received by reason of involuntary separation remains exempt from tax even if the official or employee at the time of separation had less than 10 years of service and/or is below 50 years in age.

SECTION 4. Definition or Meaning of Words, Terms and Phases. —
(a) The term "Pension Plan" is a plan established and maintained by an employer primarily to provide systematically for the payment of definitely determinable benefits to his employees over a period of years, usually for life, after retirement.
(b) The term "Profit-Sharing Plan" is a plan established and maintained by an employer to provide for the participation in his profits by his employees or their beneficiaries.
(c) The term "Stock Bonus Plan" is a plan established and maintained by an employer to provide benefits similar to those of a profit-sharing plan, except that the contributions by the employer are not necessarily dependent upon the profits and the benefits are distributable in stock of the employer company.
(d) The term "Gratuity Plan" is a plan established and maintained by an employer to provide for the payment of definitely determined benefits to his employees after retirement. This plan is similar to a pension plan, except that the benefits are not payable during a certain period or life of the retiree but totally and immediately after retirement.
(e) The phrase "at no time shall any part of the corpus or income of the fund be used for, or diverted to, any purpose other than for the exclusive benefit of the said officials and employees" includes all objects or aims not solely designed for the proper satisfaction of all liabilities to employees covered by the trust. cdll
(f) The phrase "for any cause beyond the control of said official and employee" in effect connotes involuntariness on the part of the official and employee. The separation from the service of the official or employee must not be asked for or initiated by him. The separation was not of his own making, like death, sickness, or other physical disability.

Whether or not a separation is beyond the control of the official or employee, being essentially a question of fact, shall be determined on the basis of the prevailing facts and circumstances.

SECTION 5. Investment. — No specific limitations are provided in the law with respect to investments which may be made by the trustees of an employees trust. Generally, the fund may be used by the trustees to purchase any investments permitted by the trust agreement. However, the exemption of the trust income under Section 56 (b) of the National Internal Revenue Code, as amended, may be denied if the trust —
(a) lends any part of its income or corpus without adequate security and a reasonable rate of interest;
(b) pays any compensation in excess of a reasonable allowance for salaries or other compensation for personal services actually rendered;
(c) makes any part of its services available on a preferential basis;
(d) makes any substantial purchase of securities or any other property for more than adequate consideration in money or money's worth;
(e) sells any substantial part of its securities or other property, for less than an adequate consideration in money or money's worth; or cda
(f) engages in any other transaction which results in a substantial diversion of its income or corpus.
to or from the employer or, if the employer is on individual, to or from a member of the family of the employer, or to or from a corporation controlled by the employer through the ownership, directly or indirectly, of 50% or more of the total combined voting power of all classes of stock entitled to vote or 50% or more of the total value of shares of all classes of stock of the corporation.

SECTION 6. Determination of Qualification. — Before availing of the privileges afforded by pension, gratuity, profit-sharing, or stock bonus plans, employers must secure a prior determination of the qualification of the plan by submitting to the Commissioner of Internal Revenue BIR Form No. 17.60 duly filled out and accompanied by the written program constituting the plan and the trust instrument.

SECTION 7. Coverage of the Exemption. — Republic Act No. 4917 took effect on June 17, 1967. Employees retiring after this date under a benefit plan established prior to said date but which qualifies as herein provided shall be entitled to exemption. Such plan must, however, be submitted for determination of its qualification as provided for in the preceding section. cdasia
Exemption shall also apply to employees involuntarily separated from the services of their employers after said date.

SECTION 8. Effectivity. — Those regulations shall take effect upon publication in the Official Gazette.

EDUARDO Z. ROMUALDEZ
Secretary of Finance

Recommended by:
MISAEL P. VERA
Commissioner of Internal Revenue

ATTACHMENT

BIR Form No. 17.60 - Retirement Benefit Plan


May 14, 1968
The Honorable
The Secretary of Finance
M a n i l a

S i r :

There is submitted herewith for your approval Revenue Regulations No. 1-68 implementing the provisions of R.A. 4917 which exempts from all taxes the retirement benefits received by officials and employees of private firms with a reasonable private benefit plans and all amounts received by such officials and employees on account of involuntary separation or any other cause beyond the control of said officials and employees.
The proposed regulations shall take effect upon publication in the Official Gazette.

Very truly yours,
MISAEL P. VERA
Commissioner of Internal Revenue
1st Indorsement
June 26, 1968

Respectfully returned to the Commissioner of Internal Revenue, Manila, the within Revenue Regulations No. 1-68 dated March 25, 1968, implementing the provisions of R. A. 4917 which exempts from all taxes the retirement benefits received by officials and employees of private firms with a reasonable private benefit plans and all amounts received by such officials and employees on account of involuntary separation or any other cause beyond the control of said officials and employees, duly approved. aisadc
Considering the effectivity clause of the said Revenue Regulation, publication thereof in the Official Gazette should therefore be immediately undertaken by the BIR.

EDUARDO Z. ROMUALDEZ
Secretary

April 30, 1968

MEMORANDUM for —
The Commissioner of Internal Revenue
There is submitted herewith the proposed Revenue Regulations implementing the provisions of Republic Act 4917.

LAURO D. ABRAHAN
Revenue Operations Head
(Management Planning)

CESAR KIERULF
Chief, Litigation Division

SIMEON PRUDENCIO
Chief, Law Division

ROBERTO P. CLEMENTE
Chief, Income Tax Division

SANTIAGO GAPULTOS
Asst. Chief, Prosecution Division