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PRESIDENTIAL DECREE NO. 16
PRESIDENTIAL DECREE NO. 16 -
AMENDING Section 34 (b) OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, EXEMPTING CAPITAL GAINS, EXCEPT SHARES OF STOCKS OF
CORPORATIONS COVERED UNDER Section 2 OF REPUBLIC ACT NO. 6141 UNDER
CERTAIN CONDITIONS
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WHEREAS, capital gains accrue irregularly,
and are commonly considered as addition or accretion to capital, and
not to disposable income;chanroblesvirtualawlibrary
WHEREAS, most capital gains accumulate for a period longer than one
year, and to hold them as taxable income at the particular year that
they accrue creates a heavy tax burden for the recipient;chanroblesvirtualawlibrary
WHEREAS, it has been observed that the capital gains tax has locked in
effects or causes the freezing of assets, which could otherwise be
mobilized to stimulate production and industry;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation No. 1081, dated September 21, 1972, do hereby
decree and order that Section 34(b) of the National Internal Revenue
Code, as amended, be further amended to read as follows: chanroblesvirtualawlibrary
"Sec. 34(b). In the case of a taxpayer, other than a
corporation, no gain or loss will be recognized upon the sale or
exchange of a capital asset except shares of stocks of corporations
covered in Section 2 of Republic Act No. 6141, provided that such gains
are invested in the following within six (6) months from the date the
gains are realized: chanroblesvirtualawlibrary
(1) Government Bonds; (4) Government Debentures;
(2) Government Securities; and
(3) Treasury Notes; (5) Any
productive enterprise."
All persons, natural or juridical, availing of this exemption shall
file a notice and a tax return on the sale or exchange of such capital
assets within thirty (30) days after such sale of exchange. All
investments shall also be reported within six (6) months after such
sale or exchange of capital assets out of which such capital gains have
been derived.
The Commissioner of Internal Revenue, upon approval by the Secretary of
Finance, shall promulgate the implementing regulations and shall
prescribe the forms to be used by the taxpayers.
This Decree shall be effective for one year from the date of
promulgation.
Done in the City of Manila,
this 5th day of October, in the year of Our Lord, nineteen hundred and
seventy-two.
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