Title II — TAX ON INCOME
without and sold within the Philippines, shall be treated as derived partly
from sources within and partly from sources without the Philippines.
Gains, profits and income derived from the purchase of personal property
within and its sale without the Philippines, or from the purchase of
personal property without and its sale within the Philippines shall be
treated as derived entirely from sources within the country in which sold:
Provided, however, That gain from the sale of shares of stock in a domestic
corporation shall be treated as derived entirely from sources within the
Philippines regardless of where the said shares are sold. The transfer by
a nonresident alien or a foreign corporation to anyone of any share of
stock issued by a domestic corporation shall not be effected or made in its
book unless: (1) the transferor has filed with the Commissioner a bond
conditioned upon the future payment by him of any income tax that may
be due on the gains derived from such transfer, or (2) the Commissioner
has certified that the taxes, if any, imposed in this Title and due on the
gain realized from such sale or transfer have been paid. It shall be the
duty of the transferor and the corporation the shares of which are sold or
transferred, to advise the transferee of this requirement.
(F)
Definitions. — As used in this Section the words ‘sale’ or ‘sold’ include
‘exchange’ or ‘exchanged’; and the word ‘produced’ includes ‘created’,
‘fabricated’, ‘manufactured’, ‘extracted’, ‘processed’, ‘cured’ or ‘aged’.
CHAPTER VIII. ACCOUNTING PERIODS AND METHODS OF
ACCOUNTING
SEC. 43. General Rule. — The taxable income shall be computed upon the basis
of the taxpayer’s annual accounting period (fiscal year or calendar year, as the
case may be) in accordance with the method of accounting regularly employed
in keeping the books of such taxpayer; but if no such method of accounting
has been so employed, or if the method employed does not clearly reflect the
income, the computation shall be made in accordance with such method as in
the opinion of the Commissioner clearly reflects the income. If the taxpayer’s
annual accounting period is other than a fiscal year, as defined in Section 22(Q),
or if the taxpayer has no annual accounting period, or does not keep books, or if
the taxpayer is an individual, the taxable income shall be computed on the basis
of the calendar year.
SEC. 44. Period in which Items of Gross Income Included. — The amount of
all items of gross income shall be included in the gross income for the taxable
year in which received by the taxpayer, unless, under methods of accounting
permitted under Section 43, any such amounts are to be properly accounted
National Internal Revenue Code of 1997 (as amended by the TRAIN Law, RAs 11256, 11346 and 11467)
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