TITLE IXCOMPLIANCE
REQUIREMENTSCHAPTER IKEEPING
OF
BOOKS OF ACCOUNTS AND RECORDS
SEC.
232. Keeping of Books of Accounts. -
(A) Corporations,
Companies, Partnerships or Persons Required to Keep Books of Accounts.
-
All corporations, companies, partnerships or persons required by law to
pay internal revenue taxes shall keep a journal and a ledger or their
equivalents:
Provided, however, That those whose quarterly sales, earnings,
receipts,
or output do not exceed Fifty thousand pesos (P50,000) shall keep and
use
simplified set of bookkeeping records duly authorized by the Secretary
of Finance where in all transactions and results of operations are
shown
and from which all taxes due the Government may readily and accurately
be ascertained and determined any time of the year: Provided,
further,
That corporations, companies, partnerships or persons whose gross
quarterly
sales, earnings, receipts or output exceed One hundred fifty thousand
pesos
(P150,000) shall have their books of accounts audited and examined
yearly
by independent Certified Public Accountants and their income tax
returns
accompanied with a duly accomplished Account Information Form (AIF)
which
shall contain, among others, information lifted from certified balance
sheets, profit and loss statements, schedules listing income-producing
properties and the corresponding income therefrom and other relevant
statements.cralaw:red
(B) Independent
Certified Public Accountant Defined. -
The term "Independent Certified Public Accountant", as
used
in the preceding paragraph, means an accountant who possesses the
independence
as defined in the rules and regulations of the Board of Accountancy
promulgated
pursuant to Presidential Decree No. 692, otherwise known as the Revised
Accountancy Law.
SEC.
233. Subsidiary Books. -
All corporations, companies, partnerships or persons keeping the books
of accounts mentioned in the preceding Section may, at their option,
keep
subsidiary books as the needs of their business may require: Provided,
That were such subsidiaries are kept, they shall form part of the
accounting
system of the taxpayer and shall be subject to the same rules and
regulations
as to their keeping, translation, production and inspection as are
applicable
to the journal and the ledger.
SEC.
234. Language in which Books are to be Kept; Translation. -
All suchcorporations, companies, partnerships or persons shall
keep the books or records mentioned in Section 232 hereof in native
language,
English or Spanish: Provided, however, That if in addition to
said
books or records the taxpayer keeps other books or records in a
language
other than a native language, English or Spanish, he shall make a true
and complete translation of all the entries in suck other books or
records
into a native language; English or Spanish, and the said translation
must
be made by the bookkeeper, or such taxpayer, or in his absence, by his
manager and must be certified under oath as to its correctness by the
said
bookkeeper or manager, and shall form an integral part of the aforesaid
books of accounts. The keeping of such books or records in any language
other than a native language, English or Spanish, is hereby prohibited.
SEC.
235. Preservation of Books and Accounts and Other Accounting
Records.
-
All the books of accounts, including the subsidiary books and other
accounting
records of corporations, partnerships, or persons, shall be preserved
by
them for a period beginning from the last entry in each book until the
last day prescribed by Section 203 within which the Commissioner is
authorized
to make an assessment. The said books and records shall be subject to
examination
and inspection by internal revenue officers: Provided, That for
income tax purposes, such examination and inspection shall be made only
once in a taxable year, except in the following cases:
(a) Fraud,
irregularity
or mistakes, as determined by the Commissioner;
(b) The taxpayer
requests
reinvestigation;
(c) Verification of
compliance with withholding tax laws and regulations;
(d) Verification of
capital gains tax liabilities; and
(e) In the exercise
of the Commissioner's power under Section 5(B) to obtain informationfrom other persons in which case, another or separate examination and
inspectionmay be made. Examination and inspection of books of accounts and other
accountingrecords shall be done in the taxpayer's office or place of business or
in the office ofthe Bureau of Internal Revenue. All corporations, partnerships or
persons
that retirefrom business shall, within ten (10) days from the date of retirement
or
within suchperiod of time as may be allowed by the Commissioner in special cases,
submit theirbooks of accounts, including the subsidiary books and other accounting
records to theCommissioner or any of his deputies for examination, after which they
shall
bereturned. Corporations and partnerships contemplating dissolution must
notifythe Commissioner and shall not be dissolved until cleared of any tax
liability.
Any provision of existing
general or special law to the contrary notwithstanding, the books of
accounts
and other pertinent records of tax-exempt organizations or grantees of
tax incentives shall be subject to examination by the Bureau of
Internal
Revenue for purposes of ascertaining compliance with the conditions
under
which they have been granted tax exemptions or tax incentives, and
their
tax liability, if any.