RR No. 27-2002: Amends RR No. 1-2000 further implementing R.A. No. 8748, entitled “An Act Amending R.A. No. 7916, otherwise known as the Special Economic Zone Act of 1995”

Summary

RR No. 27-2002 amends RR No. 1-2000, which implements R.A. No. 8748 amending R.A. No. 7916, the Special Economic Zone Act of 1995, on the 5% special income tax.

Key points

1. Power over the 5% tax. The power to audit and assess the five percent (5%) special income tax belongs exclusively to the Commissioner of Internal Revenue or an authorized representative. The same applies to the power to abate, cancel or compromise it, and to implement special voluntary payment programs for last priority in audit, subject to the Secretary of Finance’s approval where necessary.
2. Sharing of the tax. Three-fifths (3/5th) or sixty percent (60%) of the 5% special income tax assessed, including increments, is the National Government’s share and is collected by the Commissioner or an authorized representative. Two-fifths (2/5th) or forty percent (40%) is the share of the concerned city or municipality, which collects it from ECOZONE enterprises.
3. Same shares for abatement and compromise. The same proportions apply to abatement, cancellation, compromise or a special voluntary payment program. The taxpayer pays the 60% and 40% shares directly to the National Government and the city or municipality, respectively.

Who is affected

• ECOZONE enterprises paying the 5% special income tax

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.