RMO No. 03-2006 — Create , modifie and drop certain Alphanumeric Tax Code of elected revenue ource under the Tax Form Enhancement Program Dige t | Full Text | Attachment

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City January 16, 2006 REVENUE MEMORANDUM ORDER NO. 3-2006 SUBJECT : Creation, Modification and Dropping of Alphanumeric Tax Code (ATC) of Selected Revenue Source under the Tax Forms Enhancement Program TO : All Collection Agents, Revenue District Officers and Other Internal Revenue Officers Concerned _________________________________________________________________________ I. Objective : To facilitate the proper identification and monitoring of tax payments pursuant to Republic Act No. 9337, as implemented by Revenue Regulation No. 16-2005 dated September 1, 2005, the following ATCs are hereby created, modified and dropped. II. The following ATCs are hereby created : KIND OF TAX ISSUANCE/ BIR TAX ATC Percentage Tax LEGAL BASIS/ FORM RATES NO. REASONS Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi- Banking Functions - On interest, commissions and RR 16-2005 2551M discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived: Maturity period is five (5) years or less PT105 5%

KIND OF TAX ISSUANCE/ BIR TAX ATC LEGAL BASIS/ FORM RATES PT104 - On net trading gains within the NO. taxable year on foreign currency REASONS 7% debt securities, derivatives and other financial instruments RR 16-2005 2551M Tax on Other Non-Bank Financial RR 16-2005 2551M Intermediaries not Performing Quasi- Banking Functions 5% PT113 - On interest, commissions and 1% PT114 discounts from lending activities as well as income from financial leasing, 5% PT115 on the basis of remaining maturities of instrument from which such receipts are derived: Maturity period is five (5) years or less Maturity period is more than five (5) years - On all other items treated as gross income Tax on Banks and Non-Bank Financial RR 16-2005 1600 7% WB104 Intermediaries Performing Quasi- Banking Functions: - On net trading gains within the taxable year on foreign currency debt securities, derivatives and other similar financial instruments

KIND OF TAX ISSUANCE/ BIR TAX ATC LEGAL BASIS/ FORM NO. RATES REASONS 1600 Tax on Other Non-Bank Financial Intermediaries not Performing Quasi- 1600 Banking Functions 1600 - On interest, commissions and RR 16-2005 discounts from lending activities as well as income from financial leasing, 5% WB108 on the basis of the remaining maturities of instruments from which 1% WB109 such receipts are derived: 5% WB110 Maturity period is five (5) years or less Maturity period is more than five (5) years - On all other items treated as gross income Person exempt from VAT under RR 14-2003 3% WB082 Sec. 109v (creditable) Private RR 14-2003 Withholding Agents 3% WB084 Person exempt from VAT under Sec. 109v (final) VALUE-ADDED TAX Government public works For 1600 5% WV030 contractors subject to 5% Monitoring III. The following ATCs are hereby modified : See Attachments

IV. The following ATCs are hereby dropped : KIND OF TAX ISSUANCE/ BIR TAX ATC Percentage Tax LEGAL BASIS/ FORM NO. RATES REASONS 2551M 2551M Tax on Finance Companies 1600 - On interest, discounts and other RR 16-2005 5% PT111 items of gross income paid to finance 1600 companies and other financial intermediaries not performing quasi- banking function - On interest, commissions and RR 16-2005 5%, 3%, PT112 discounts paid from their loan RR 16-2005 1% & 0% transactions from finance companies as well as financial leasing based on 3% WB302 the remaining maturities of the instruments 0% WB304 Tax on Banks and Non-Bank Financial Intermediaries - On interest, commissions and discounts paid to banks and non- bank financial intermediaries arising out of lending activities as well as financial leasing, on basis of the remaining maturities of instrument: Medium term maturity (over 2 years to 4 years) Over 7 years Tax on Finance Companies - On interest, discounts and other RR 16-2005 5% WB111 items of gross income paid to finance companies and other financial intermediaries not performing quasi- banking functions

V. Repealing clause : This Revenue Memorandum Order revises portions of all other issuances inconsistent herewith. VI. Effectivity : This Revenue Memorandum Order shall take effect immediately. (Original Signed) JOSE MARIO C. BU�AG Commissioner of Internal Revenue B-3