ORGANIZATION AND FUNCTION OF officer of the national and local governments,

THE BUREAU OF INTERNAL REVENUE government agencies and instrumentalities, including the

(As Last Amended by RA 10963) [1] Bangko Sentral ng Pilipinas and government-owned or
-controlled corporations, any information such as, but
SEC. 1. Title of the Code. - This Code shall be known as not limited to, costs and volume of production, receipts
the National Internal Revenue Code of 1997. [2] or sales and gross incomes of taxpayers, and the names,
addresses, and financial statements of corporations,
SEC. 2. Powers and Duties of the Bureau of Internal mutual fund companies, insurance companies, regional
Revenue. - The Bureau of Internal Revenue shall be operating headquarters of multinational companies, joint
under the supervision and control of the Department of accounts, associations, joint ventures of consortia and
Finance and its powers and duties shall comprehend the registered partnerships, and their members; Provided,
assessment and collection of all national internal revenue That the Cooperative Development Authority shall
taxes, fees, and charges, and the enforcement of all submit to the Bureau a tax incentive report, which shall
forfeitures, penalties, and fines connected therewith, include information on the income tax, value added tax,
including the execution of judgments in all cases decided and other tax incentives availed of by cooperatives
in its favor by the Court of Tax Appeals and the ordinary registered and enjoying incentives under Republic Act
courts. The Bureau shall give effect to and administer No. 6938, as amended: Provided, further, That the
the supervisory and police powers conferred to it by this information submitted by the Cooperative Development
Code or other laws. Authority to the Bureau shall be submitted to the
Department of Finance and shall be included in the
SEC. 3. Chief Officials of the Bureau of Internal database created under Republic Act No. 10708,
Revenue. - The Bureau of Internal Revenue shall have a otherwise known as “The Tax Incentives Management
chief to be known as Commissioner of Internal Revenue, and Transparency Act (TIMTA).” [4]
hereinafter referred to as the Commissioner, and four (4)
assistant chiefs to be known as Deputy Commissioners. (C) To summon the person liable for tax or required to
file a return, or any officer or employee of such person,
SEC. 4. Power of the Commissioner to Interpret Tax or any person having possession, custody, or care of the
Laws and to Decide Tax Cases. - The power to interpret books of accounts and other accounting records
the provisions of this Code and other tax laws shall be containing entries relating to the business of the person
under the exclusive and original jurisdiction of the liable for tax, or any other person, to appear before the
Commissioner, subject to review by the Secretary of Commissioner or his duly authorized representative at a
Finance. time and place specified in the summons and to produce
such books, papers, records, or other data, and to give
The power to decide disputed assessments, refunds of testimony;
internal revenue taxes, fees or other charges, penalties
imposed in relation thereto, or other matters arising (D) To take such testimony of the person concerned,
under this Code or other laws or portions thereof under oath, as may be relevant or material to such
administered by the Bureau of Internal Revenue is inquiry; and
vested in the Commissioner, subject to the exclusive
appellate jurisdiction of the Court of Tax Appeals. [3] (E) To cause revenue officers and employees to make a
canvass from time to time of any revenue district or
SEC. 5. Power of the Commissioner to Obtain region and inquire after and concerning all persons
Information, and to Summon, Examine, and Take therein who may be liable to pay any internal revenue
Testimony of Persons. - In ascertaining the correctness tax, and all persons owning or having the care,
of any return, or in making a return when none has been management or possession of any object with respect to
made, or in determining the liability of any person for which a tax is imposed.
any internal revenue tax, or in collecting any such
liability, or in evaluating tax compliance, the The provisions of the foregoing paragraphs
Commissioner is authorized: notwithstanding, nothing in this Section shall be
construed as granting the Commissioner the authority to
(A) To examine any book, paper, record, or other data inquire into bank deposits other than as provided for in
which may be relevant or material to such inquiry; Section 6(F) of this Code.

(B) To obtain on a regular basis from any person other SEC. 6. Power of the Commissioner to Make
than the person whose internal revenue tax liability is Assessments and Prescribe Additional Requirements
subject to audit or investigation, or from any office or for Tax Administration and Enforcement. -
(A) Examination of Return and Determination of Tax When it is found that a person has failed to issue receipts
Due. After a return has been filed as required under the and invoices in violation of the requirements of Sections
provisions of this Code, the Commissioner or his duly 113 and 237 of this Code, or when there is reason to
authorized representative may authorize the examination believe that the books of accounts or other records do
of any taxpayer and the assessment of the correct amount not correctly reflect the declarations made or to be made
of tax, notwithstanding any law requiring the prior in a return required to be filed under the provisions of
authorization of any government agency or this Code, the Commissioner, after taking into account
instrumentality [4]: Provided, however, That failure to file the sales, receipts, income or other taxable base of other
a return shall not prevent the Commissioner from persons engaged in similar businesses under similar
authorizing the examination of any taxpayer. situations or circumstances or after considering other
relevant information may prescribe a minimum amount
The tax or any deficiency tax so assessed shall be paid of such gross receipts, sales and taxable base, and such
upon notice and demand from the Commissioner or from amount so prescribed shall be prima facie correct for
his duly authorized representative. purposes of determining the internal revenue tax
liabilities of such person.
Any return, statement of declaration filed in any office
authorized to receive the same shall not be withdrawn: (D) Authority to Terminate Taxable Period. - When it
Provided, That within three (3) years from the date of shall come to the knowledge of the Commissioner that a
such filing, the same may be modified, changed, or taxpayer is retiring from business subject to tax, or is
amended: Provided, further, That no notice for audit or intending to leave the Philippines or to remove his
investigation of such return, statement or declaration has property therefrom or to hide or conceal his property, or
in the meantime been actually served upon the taxpayer. is performing any act tending to obstruct the proceedings
for the collection of the tax for the past or current quarter
(B) Failure to Submit Required Returns, Statements, or year or to render the same totally or partly ineffective
Reports and other Documents. - When a report required unless such proceedings are begun immediately, the
by law as a basis for the assessment of any national Commissioner shall declare the tax period of such
internal revenue tax shall not be forthcoming within the taxpayer terminated at any time and shall send the
time fixed by laws or rules and regulations or when there taxpayer a notice of such decision, together with a
is reason to believe that any such report is false, request for the immediate payment of the tax for the
incomplete or erroneous, the Commissioner shall assess period so declared terminated and the tax for the
the proper tax on the best evidence obtainable.  preceding year or quarter, or such portion thereof as may
be unpaid, and said taxes shall be due and payable
In case a person fails to file a required return or other immediately and shall be subject to all the penalties
document at the time prescribed by law, or willfully or hereafter prescribed, unless paid within the time fixed in
otherwise files a false or fraudulent return or other the demand made by the Commissioner.
document, the Commissioner shall make or amend the
return from his own knowledge and from such (E) Authority of the Commissioner to Prescribe Real
information as he can obtain through testimony or Property Values. –The Commissioner is hereby
otherwise, which shall be prima facie correct and authorized to divide the Philippines into different zones
sufficient for all legal purposes. or areas and shall, upon mandatory consultation with
competent appraisers both from the private and public
(C) Authority to Conduct Inventory-taking, sectors, and with prior notice to affected taxpayers,
Surveillance and to Prescribe Presumptive Gross Sales determine the fair market value of real properties located
and Receipts. - The Commissioner may, at any time in each zone or area, subject to automatic adjustment
during the taxable year, order inventory-taking of goods once every three (3) years through rules and regulations
of any taxpayer as a basis for determining his internal issued by the Secretary of Finance based on the current
revenue tax liabilities, or may place the business Philippine valuation standards: Provided, That no
operations of any person, natural or juridical, under adjustment in zonal valuation shall be valid unless
observation or surveillance if there is reason to believe published in a newspaper of general circulation in the
that such person is not declaring his correct income, province, city or municipality concerned, or in the
sales or receipts for internal revenue tax purposes. The absence thereof, shall be posted in the provincial capitol,
findings may be used as the basis for assessing the taxes city or municipal hall and in two (2) other conspicuous
for the other months or quarters of the same or different public places therein: Provided, further, That the basis of
taxable years and such assessment shall be deemed any valuation, including the records of consultations
prima facie correct. done, shall be public records open to the inquiry of any
taxpayer. [4] For purposes of computing any internal
revenue tax, the value of the property shall be, The Commissioner shall provide the tax information
whichever is the higher of: obtained from banks and financial institutions pursuant
to a convention or agreement upon request of the foreign
(1) The fair market value as determined by the tax authority when such requesting foreign tax authority
Commissioner; or has provided the following information to demonstrate
the foreseeable relevance of the information to the
(2) The fair market value as shown in the schedule of request:
values of the Provincial and City Assessors.
(a) The identity of the person under examination or
(F) Authority of the Commissioner to Inquire into investigation;
Bank Deposit Accounts and Other Related
information held by Financial Institutions. [5] - (b) A statement of the information being sought,
Notwithstanding any contrary provision of Republic Act including its nature and the form in which the said
No. 1405, Republic Act No. 6426, otherwise known as foreign tax authority prefers to receive the information
the Foreign Currency Deposit Act of the Philippines, and from the Commissioner;
other general or special laws, the Commissioner is
hereby authorized to inquire into the bank deposits and (c) The tax purpose for which the information is being
other related information held by financial institutions sought;
of:
(d) Grounds for believing that the information requested
(1) A decedent to determine his gross estate; and is held in the Philippines or is in the possession or
control of a person within the jurisdiction of the
(2) Any taxpayer who has filed an application for Philippines;
compromise of his tax liability under Section 204(A)(2)
of this Code by reason of financial incapacity to pay his (e) To the extent known, the name and address of any
tax liability. person believed to be in possession of the requested
information;
In case a taxpayer files an application to compromise the
payment of his tax liabilities on his claim that his (f) A statement that the request is in conformity with the
financial position demonstrates a clear inability to pay law and administrative practices of the said foreign tax
the tax assessed, his application shall not be considered authority, such that if the requested information was
unless and until he waives in writing his privilege under within the jurisdiction of the said foreign tax authority
Republic Act No. 1405, Republic Act No. 6426, then it would be able to obtain the information under its
otherwise known as the Foreign Currency Deposit Act of laws or in the normal course of administrative practice
the Philippines, or under other general or special laws, and that it is in conformity with a convention or
and such waiver shall constitute the authority of the international agreement; and
Commissioner to inquire into the bank deposits of the
taxpayer. (g) A statement that the requesting foreign tax authority
has exhausted all means available in its own territory to
(3) A specific taxpayer or taxpayers subject of a request obtain the information, except those that would give rise
for the supply of tax information from a foreign tax to disproportionate difficulties.
authority pursuant to an international convention or
agreement on tax matters to which the Philippines is a The Commissioner shall forward the information as
signatory or a party of: Provided, That the information promptly as possible to the requesting foreign tax
obtained from the banks and other financial institutions authority. To ensure a prompt response, the
may be used by the Bureau of Internal Revenue for tax Commissioner shall confirm receipt of a request in
assessment, verification, audit and enforcement writing to the requesting tax authority and shall notify
purposes. the latter of deficiencies in the request, if any, within
sixty (60) days from receipt of the request.
In case of a request from a foreign tax authority for tax
information held by banks and financial institutions, the If the Commissioner is unable to obtain and provide the
exchange of information shall be done in a secure information within ninety (90) days from receipt of the
manner to ensure confidentiality thereof under such rules request, due to obstacles encountered in furnishing the
and regulations as may be promulgated by the Secretary information or when the bank or financial institution
of Finance, upon recommendation of the Commissioner. refuses to furnish the information, he shall immediately
inform the requesting tax authority of the same,
explaining the nature of the obstacles encountered or the (b) The power to issue rulings of first impression or to
reasons for refusal. reverse, revoke or modify any existing ruling of the
Bureau;
The term “foreign tax authority,” as used herein, shall
refer to the tax authority or tax administration of the (c) The power to compromise or abate, under Sec. 204
requesting State under the tax treaty or convention to (A) and (B) of this Code, any tax liability: Provided,
which the Philippines is a signatory or a party of. however, That assessments issued by the regional offices
involving basic deficiency taxes of Five hundred
(G) Authority to Accredit and Register Tax Agents. - thousand pesos (P500,000) or less, and minor criminal
The Commissioner shall accredit and register, based on violations, as may be determined by rules and
their professional competence, integrity and moral regulations to be promulgated by the Secretary of
fitness, individuals and general professional partnerships finance, upon recommendation of the Commissioner,
and their representatives who prepare and file tax discovered by regional and district officials, may be
returns, statements, reports, protests, and other papers compromised by a regional evaluation board which shall
with or who appear before, the Bureau for taxpayers. be composed of the Regional Director as Chairman, the
Within one hundred twenty (120) days from January 1, Assistant Regional Director, the heads of the Legal,
1998, the Commissioner shall create national and Assessment and Collection Divisions and the Revenue
regional accreditation boards, the members of which District Officer having jurisdiction over the taxpayer, as
shall serve for three (3) years, and shall designate from members; and
among the senior officials of the Bureau, one (1)
chairman and two (2) members for each board, subject to (d) The power to assign or reassign internal revenue
such rules and regulations as the Secretary of Finance officers to establishments where articles subject to excise
shall promulgate upon the recommendation of the tax are produced or kept.
Commissioner.
SEC. 8. Duty of the Commissioner to Ensure the
Individuals and general professional partnerships and Provision and Distribution of Forms, Receipts,
their representatives who are denied accreditation by the Certificates, and Appliances, and the Acknowledgment
Commissioner and/or the national and regional of Payment of Taxes. -
accreditation boards may appeal such denial to the
Secretary of Finance, who shall rule on the appeal within (A) Provision and Distribution to Proper-Officials. –
sixty (60) days from receipt of such appeal. Failure of Any law to the contrary notwithstanding, it shall be the
the Secretary of Finance to rule on the Appeal within the duty of the Commissioner, among other things, to
prescribed period shall be deemed as approval of the prescribe, provide, and distribute to the proper officials
application for accreditation of the appellant. the requisite licenses; internal revenue stamps; unique,
secure and non-removable identification markings
(H) Authority of the Commissioner to Prescribe (hereafter called unique identification markings), such as
Additional Procedural or Documentary codes or stamps, be affixed to or form part of all unit
Requirements. - The Commissioner may prescribe the packets and packages and any outside packaging of
manner of compliance with any documentary or cigarettes and bottles of distilled spirits; labels and other
procedural requirement in connection with the forms; certificates; bonds; records; invoices; books;
submission or preparation of financial statements receipts; instruments; appliances and apparatus used in
accompanying the tax returns. administering the laws falling within the jurisdiction of
the Bureau. For this purpose, internal revenue stamps, or
SEC. 7. Authority of the Commissioner to Delegate other markings and labels shall be caused by the
Power. - The Commissioner may delegate the powers Commissioner to be printed with adequate security
vested in him under the pertinent provisions of this Code features.
to any or such subordinate officials with the rank
equivalent to a division chief or higher, subject to such Internal revenue stamps, whether of a bar code or fuson
limitations and restrictions as may be imposed under design, or other markings shall be firmly and
rules and regulations to be promulgated by the Secretary conspicuously affixed or printed on each pack of cigars
of Finance, upon recommendation of the Commissioner: and cigarettes and bottles of distilled spirits subject to
Provided, however, That the following powers of the excise tax in the manner and form as prescribed by the
Commissioner shall not be delegated: Commissioner, upon approval of the Secretary of
Finance.
(a) The power to recommend the promulgation of rules
and regulations by the Secretary of Finance; To further improve tax administration, cigarette and
alcohol manufacturers shall be required to install
automated volume-counters of packs and bottles to deter the Regional Director, any neglect of duty,
over-removals and misdeclaration of removals. incompetency, delinquency, or malfeasance in office of
any internal revenue officer of which he may obtain
(B) Receipts for Payment Mode. – It shall be the duty of knowledge, with a statement of all the facts and any
the Commissioner or his duly authorized representative evidence sustaining each case.
or an authorized agent bank to whom any payment of
any tax is made under the provisions of this Code to SEC. 12. Agents and Deputies for Collection of
acknowledge the payment of such tax, expressing the National Internal Revenue Taxes. - The following are
amount paid and the particular account for which such hereby constituted agents of the Commissioner:
payment was made in a form and manner prescribed
therefor by the Commissioner. a) The Commissioner of Customs and his subordinates
with respect to the collection of national internal revenue
SEC. 9. Internal Revenue Districts. - With the approval taxes on imported goods;
of the Secretary of Finance, the Commissioner shall
divide the Philippines into such number of revenue b) The head of the appropriate government office and his
districts as may from time to time be required for subordinates with respect to the collection of energy tax;
administrative purposes. Each of these districts shall be and
under the supervision of a Revenue District Officer.
c) Banks duly accredited by the Commissioner with
SEC. 10. Revenue Regional Director. - Under rules and respect to receipt of payments internal revenue taxes
regulations, policies and standards formulated by the authorized to be made thru banks.
Commissioner, with the approval of the Secretary of
Finance, the Revenue Regional director shall, within the Any officer or employee of an authorized agent bank
region and district offices under his jurisdiction, among assigned to receive internal revenue tax payments and
others:  transmit tax returns or documents to the Bureau of
Internal Revenue shall be subject to the same sanctions
(a) Implement laws, policies, plans, programs, rules and and penalties prescribed in Sections 269 and 270 of this
regulations of the department or agencies in the regional Code.
area;
(b) Administer and enforce internal revenue laws, and SEC. 13. Authority of a Revenue Officer. - Subject to
rules and regulations, including the assessment and the rules and regulations to be prescribed by the
collection of all internal revenue taxes, charges and fees; Secretary of Finance, upon recommendation of the
(c) Issue Letters of authority for the examination of Commissioner, a Revenue Officer assigned to perform
taxpayers within the region; assessment functions in any district may, pursuant to a
(d) Provide economical, efficient and effective service to Letter of Authority issued by the Revenue Regional
the people in the area; Director, examine taxpayers within the jurisdiction of
(e) Coordinate with regional offices or other the district in order to collect the correct amount of tax,
departments, bureaus and agencies in the area; or to recommend the assessment of any deficiency tax
(f) Coordinate with local government units in the area; due in the same manner that the said acts could have
(g) Exercise control and supervision over the officers been performed by the Revenue Regional Director
and employees within the region; and himself.
(h) Perform such other functions as may be provided by
law and as may be delegated by the Commissioner. SEC. 14. Authority of Officers to Administer Oaths
and Take Testimony. - The Commissioner, Deputy
SEC. 11. Duties of Revenue District Officers and Other Commissioners, Service Chiefs, Assistant Service
Internal Revenue Officers. - It shall be the duty of every Chiefs, Revenue Regional Directors, Assistant Revenue
Revenue District Officer or other internal revenue Regional Directors, Chiefs and Assistant Chiefs of
officers and employees to ensure that all laws, and rules Divisions, Revenue District Officers, special deputies of
and regulations affecting national internal revenue are the Commissioner, internal revenue officers and any
faithfully executed and complied with, and to aid in the other employee of the Bureau thereunto especially
prevention, detection and punishment of frauds of deputized by the Commissioner shall have the power to
delinquencies in connection therewith. administer oaths and to take testimony in any official
matter or investigation conducted by them regarding
It shall be the duty of every Revenue District Officer to matters within the jurisdiction of the Bureau.
examine the efficiency of all officers and employees of
the Bureau of Internal Revenue under his supervision,
and to report in writing to the Commissioner, through
SEC. 15. Authority of Internal Revenue Officers to SEC. 19. Contents of Commissioner's Annual Report. -
Make Arrests and Seizures. - The Commissioner, the The Annual Report of the Commissioner shall contain
Deputy Commissioners, the Revenue Regional detailed statements of the collections of the Bureau with
Directors, the Revenue District Officers and other specifications of the sources of revenue by type of tax,
internal revenue officers shall have authority to make by manner of payment, by revenue region and by
arrests and seizures for the violation of any penal law, industry group and its disbursements by classes of
rule or regulation administered by the Bureau of Internal expenditures.
Revenue. Any person so arrested shall be forthwith
brought before a court, there to be dealt with according In case the actual collection exceeds or falls short of
to law. target as set in the annual national budget by fifteen
percent (15%) or more, the Commissioner shall explain
SEC. 16. Assignment of Internal Revenue Officers the reason for such excess or shortfall.
Involved in Excise Tax Functions to Establishments
Where Articles subject to Excise Tax are Produced or SEC. 20. Submission of Report and Pertinent
Kept. - The Commissioner shall employ, assign, or Information by the Commissioner. -
reassign internal revenue officers involved in excise tax
functions, as often as the exigencies of the revenue (A) Submission of Pertinent Information to Congress. -
service may require, to establishments or places where The provision of Section 270 of this Code to the contrary
articles subject to excise tax are produced or kept: notwithstanding, the Commissioner shall, upon request
Provided, That an internal revenue officer assigned to of Congress and in aid of legislation, furnish its
any such establishment shall in no case stay in his appropriate Committee pertinent information including
assignment for more than two (2) years, subject to rules but not limited to: industry audits, collection
and regulations to be prescribed by the Secretary of performance data, status reports in criminal actions
Finance, upon recommendation of the Commissioner. initiated against persons and taxpayer's returns:
Provided, however, That any return or return information
SEC. 17. Assignment of Internal Revenue Officers and which can be associated with, or otherwise identify,
Other Employees to Other Duties. - The Commissioner directly or indirectly, a particular taxpayer shall be
may, subject to the provisions of Section 16 and the laws furnished the appropriate Committee of Congress only
on civil service, as well as the rules and regulations to be when sitting in Executive Session Unless such taxpayer
prescribed by the Secretary of Finance upon the otherwise consents in writing to such disclosure.
recommendation of the Commissioner, assign or
reassign internal revenue officers and employees of the (B) Report to Oversight Committee. - The
Bureau of Internal Revenue, without change in their Commissioner shall, with reference to Section 204 of
official rank and salary, to other or special duties this Code, submit to the Oversight Committee referred to
connected with the enforcement or administration of the in Section 290 hereof, through the Chairmen of the
revenue laws as the exigencies of the service may Committee on Ways and Means of the Senate and House
require: Provided, That internal revenue officers of Representatives, a report on the exercise of his powers
assigned to perform assessment or collection function pursuant to the said section, every six (6) months of each
shall not remain in the same assignment for more than calendar year.
three (3) years; Provided, further, That assignment of
internal revenue officers and employees of the Bureau to SEC. 21. Sources of Revenue. - The following taxes,
special duties shall not exceed one (1) year. fees and charges are deemed to be national internal
revenue taxes:
SEC. 18. Reports of Violation of Laws. - When an
internal revenue officer discovers evidence of a violation (a) Income tax;
of this Code or of any law, rule or regulations (b) Estate and donor's taxes;
administered by the Bureau of Internal Revenue of such (c) Value-added tax;
character as to warrant the institution of criminal (d) Other percentage taxes;
proceedings, he shall immediately report the facts to the (e) Excise taxes;
Commissioner through his immediate superior, giving (f) Documentary stamp taxes; and
the name and address of the offender and the names of (g) Such other taxes as are or hereafter may be imposed
the witnesses if possible: Provided, That in urgent cases, and collected by the Bureau of Internal Revenue.
the Revenue Regional director or Revenue District
Officer, as the case may be, may send the report to the
corresponding prosecuting officer in the latter case, a
copy of his report shall be sent to the Commissioner.