NATIONAL and local election candidates have been reminded by the Bureau of Internal Revenue (BIR) to submit their Statement of Contributions and Expenditures (SOCE), as well as corresponding tax payments and other duties, 30 days from May 9.

The BIR said in a statement over the weekend that every candidate and treasurer of political parties/ party list groups must submit the SOCE to the Commission on Elections (Comelec) and the revenue district office (RDO) where they are registeredL whether they win or lose.

“As a general ruleL campaign contributions are not included in the taxable income of the candidate to whom they were givenL the reason being that such contributions were given not for the personal expenditure/enrichment of the concerned candidateL but for the purpose of utilizing such contributions for his/her campaignL”

it added regarding campaign contributions’ taxability.

The bureau also said these campaign contributions must have been used to cover a candidate’s election campaign expenses during the campaign period in order to be declared exempt from the income tax.

Unused/excess campaign contributionsL as well as donations made before the campaign seasonL net of the candidate’s or political party’s/party list’s campaign expendituresL are subject to income tax and must be included in their taxable income as reported on their income tax return.

It goes on to say that any monetary or in-kind contributions to candidatesL political parties or party list groups that are properly disclosed to Comelec are exempted from donor’s tax.

MeanwhileL donations made by corporations in violation of the Philippine Corporation Code are liable to donor’s tax and cannot be deducted as a political contribution by the donor/corporation.

The BIR further said income payments made by political candidatesL political parties/party-list groupsL and individuals or juridical persons for purchases of goods and services intended to be given as campaign contributions to political parties and candidates are subject to a 5-percent creditable withholding tax (CWT).

“Expenses incurred by the candidates which were given free of chargeL such as useL rental or hire of landL water or aircraftL equipmentL facilitiesL apparatus and paraphernalia used in the campaign shall be assessed by the candidate and declare the amount commensurate with the expenses for the use thereofL based on the prevailing rate in the locality and shall be included in the total campaign contributions received and expenses incurred by the candidateL” it continued.

Expenses that were not subjected to the 5-percent CWTL on the other handL are not considered used campaign fundsL and candidatesL political parties/partylist groups are prohibited from deducting such costs from their campaign donations. As a resultL the entire amount associated with the expense must be recorded as unutilized campaign money liable to income tax.

“All candidatesL political parties and party list groups who failed to register and comply with the requirements of the BIR will be subjected to penalties under the Revised Consolidated Schedule of Compromise Penalties for Violations of the NIRC (National Internal Revenue Code) of 1997L as amended...L” the bureau said.