Friday, November 16, 2007

Section 3C.01 Franchise Tax

Article C. Franchise Tax

Section 3C.01 Imposition of Tax – There is hereby levied a tax at the rate of eighty two and five percent (82.5%) of one percent (1%) on businesses enjoying a franchise based on the gross annual receipts which shall include both cash sales and sales on account realized during the preceding calendar year within the territorial jurisdiction of the city.

In the case of a newly-started business, the tax shall be seven and five percent (7.5%) or eight and twenty five percent (8.25%) of one percent (1%) of the capital investment.

In the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or fraction thereof.

The capital investment to be used as basis of the tax of a newly started business as herein provided, shall be determined in the following manner:

a) If the principal office of the business is located in the city, the paid-up capital stated in the articles of incorporation in case of corporations, or in any similar document in case of other types of business organizations, shall be considered as the capital investment.

b) Where there is a branch or sales office which commences business operations during the same year as the principal office but which is located in another province or city, the paid-up capital referred in (a) shall be reduced by the amount of the capital investment made for the said branch or sales office which shall be taxable instead by the city where it is located.

c) Where the newly started business located in the city is a branch or sales office commencing business operations at a year later than that of the principal office, capital investment shall mean the total funds investment in the branch or sales office.

Section 3C.02 Exclusion – The term business enjoying franchise shall not include holders of certificates of public conveyance for the operation of public utility vehicles for the reason that such certificates are not considered as franchise.

Section 3C.03 Time of Payment - The tax shall be paid in full on or before January 31 of each year. The same may, however, be paid without penalty in four quarterly installments, the first quarter within the 31st of January and within (20) twenty days of each quarter for the second, third and fourth quarters.

Section 3C.04 Surcharge for the Late Payment – Failure to pay the levied tax on time shall be subject to a surcharge of twenty five percent (25%) of the original amount of tax due, such surcharge to be paid at the same time and in the same manner as the tax due.

Section 3C.05 Interest of Unpaid Tax - In addition to the surcharge for late payment, there shall be imposed upon the unpaid amount an interest of two percent (2%) per month from the due date until the tax is fully paid but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty-six (36) months

Section 3C.06 Penalty – Any violation of the provision of this Article shall be punishable by a fine of not less than One Thousand Pesos (PhP1,000.00) but not more than Five Thousand Pesos (PhP5,000.00) or imprisonment of not less than one (1) month but not more than six (6) months, or both, at the discretion of the court

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