per ton, and 30 percent in the case of lode mines which average less than 7 pesos per ton.

Where mining is carried on upon private lands, the royalty due on the value of the output of such mines under all leases granted for the purpose is reduced by 5 percent of the amount due to the Government, such amount to be paid by the lessee to the land owner. This privilege is not granted to any person acquiring an option on the surface right after any mining location has been made on the minerals found therein.

MISCELLANEOUS TAXES

Title VIII of the Revenue Code imposes a number of miscellaneous taxes such as taxes on resources of banks, on receipts of insurance companies, franchise tax, amusement taxes, charges on forest products, fees for sealing of weights and measures, firearms tax, radio fees, tobacco inspection fees and water rentals.

Tax on insurance premiums. Every person, company, or corporation (except purely cooperative companies or associations) doing insurance business of any sort in the Philippines is, according to section 255, liable to a tax of 1 percent of the total premiums collected during the first 10 years of operation and 1.5 percent of the total premiums collected thereafter. Premiums refunded within 6 months after payment on account of rejection of risk or returned for other reason to person insured is not included in taxable receipts, nor is any tax payable upon reinsurance by a company that has already paid the tax. "Cooperative companies or associations" are such as are conducted by the members thereof with money collected from among themselves and solely for their own protection and not for profit. The tax is due on July 1 in each year for the preceding calendar year, and if unpaid 15 days thereafter the amount of tax is increased by 25 percent. An annual return in prescribed form must be made by April 1 in each year.

Tax due from agents of foreign insurance companies. Every fire, marine, or miscellaneous insurance agent authorized under section 192 of Act No. 2427, as amended by Acts No. 2648 and 3575 to procure policies of insurance as he may previously have been legally authorized to transact on risks located in the Philippines for companies not authorized to transact business in the Philippines is likewise required to make a yearly report to the Collector of the Internal Revenue, showing the entire amount of all premiums received by the company he represents under the authority of the Insurance Law. And such agent is required to pay a tax equal to twice the tax imposed in section 255, payable at the same time and subject to the same penalty for delinquency: Provided, however, That the provisions of this section shall not apply to reinsurance: And provided, further, That the prohibitions of this section shall not affect the right of an owner of property to apply for and obtain for himself policies in foreign companies in cases where said owner does not make use of the services of any agent, company or corporation residing or doing business in the Philippines. In all cases where owners of property obtain insurance directly with foreign companies, it shall be the duty of said owners to report to the Insurance Commissioner and to the Collector of Internal Revenue each case where insurance has been so effected, and shall pay a tax of 1.5 per centum on premiums paid, in the manner required by section 255 of insurance companies and shall be subject to the same penalty for failure to do so. (Section 258.)

RESIDENCE TAX

Commonwealth Act No. 465 of June 14, 1939, which becomes effective on January 1, 1940, imposes an annual residence tax on both individuals and corporations. The tax is composed of a fixed amount plus an additional tax which is based on the value of real property, gross receipts from business and salaries.

Every inhabitant of the Philippines over 18 years of age who has been regularly employed on a wage or salary basis for at least 30 consecutive working days during any calendar year at the rate of not less than 50 centavos a day, or who is engaged in business or occupation, or who owns real property with an aggregate value of 1,000 pesos or more, or who is required by law to file an income tax return must pay an annual residence tax of 50 centavos, and an additional tax which in no case is to exceed 500 pesos, determined on the basis of the following schedule: (a) 1 peso for every 5,000 pesos worth of real property in the Philippines owned during the preceding year, the valuation to be based upon the assessment rolls of the municipality where the property is situated: (b) 1 beso for every 5,000 pesos of gross receipts or earnings derived by such person from his business in the Philippines during the preceding year; and (c) 1 peso for every 1,000 pesos of salaries or gross receipts or earnings from the exercise of any profession in the Philippines or from the pursuit of any occupation therein during the preceding year. For the purposes of the additional tax, dividends received by the taxpayer from any corporation are not considered as part of his gross receipts or earnings. In the case of husband and wife, the additional tax is based upon the total property owned by them, or upon the total gross receipts or earnings derived by them. Every corporation, whether domestic or resident foreign, engaged in or doing business in the Philippines must pay an annual residence tax of 5 pesos, and an additional tax not to exceed 1,000 pesos, accordance with the following schedule: (a) As in the case of individuals, 1 peso for every 5,000 pesos worth of property; and (b) 1 peso for every 5,000 pesos of gross receipts or earnings derived from business in the Philippines during the preceding year. Dividends received by a corporation from another corporation are not included in gross receipts. The term "resident foreign" when applied to a corporation means a foreign corporation engaged in trade or business within the Philippines or having an office or place of business therein. The term "corporation as used in this Act includes joint-stock company, partnership, joint account (cuenta en participacion), association, or insurance company, no matter how created or organized.

in

The cer

Upon payment of the tax a residence certificate will be issued to every person or corporation, and those not liable to the tax may obtain such certificate upon the payment of 20 centavos. tificate for persons will contain the full name, place, and date of birth, citizenship, civil status, length of Philippine residence, occupation or calling, right-hand thumb mark, signature of the person and of the officer issuing it. Transient visitors when their stay does not exceed 3 months, United States officials and foreign diplomatic and consular representatives are exempted from the tax.

The tax accrues on January 1 of each year and is payable on or before the last day of April. The presentation of the residence certificate is required on certain occasions such as on acknowledgment

of any document before a notary public, on receipt of any license or permit from any public authority, on payment of any tax or fee, on receipt of any money from any public fund or on transaction of other official business, etc.

CORPORATION REGISTRATION FEES

Under the provisions of section 8 of Act No. 1459 of March 1, 1906, as amended (Corporation Law) the following fees are charged for filing articles of incorporation:

For nonstock corporations, whether domestic or foreign, the registration fee is 25 pesos. If the shares of stock of a corporation are without par value, then for the purpose of fixing the fees, such shares shall be taken to be of the par value of 100 besos each. Section 68 of the Corporation Law Pertaining to registration of foreign corporations provides that the Registrar shall collect a fee in proportion to the corporate capital of each corporation to be fixed in accordance with the schedule established in section 8.

Property in material things traces its origin to the most remote times; whereas property in the fruits of that divine mass within us where thought is perfected, beauty conceived, and feeling given expression has been made effective among civilized nations only as recently as the close of the last

century.

Translated from Florencio Loza Amuchas tegin, La Ley de Propriedad Intelectual es de Competencia Federal, in March-April, 1939, Revista del Colegio de Abogados

de Buenos Aires.

His Majesty the King of Sweden and the President of the United States of America, being desirous of avoiding double taxation and of establishing rules of reciprocal administrative assistance in the case of income and other taxes, have decided to conclude a Convention, and for that purpose have appointed as their respective Plenipotentiaries:

His Majesty the King of Sweden:

W. Bostrom, Envoy Extraordinary and Minister Plenipotentiary at Washington; and

The President of the United States of America:

Sumner. Welles, Acting Secretary of State of the United States of America; who, having communicated to one another their full powers found in good and due form, have agreed upon the following Articles:

ARTICLE I

The taxes referred to in this Convention are:

(a) In the case of Sweden:

(1) The National income and property tax, including surtax. (2) The National special property tax.

(3) The communal income tax.

(b) In the case of the United States of America:

(1) The Federal income taxes, including surtaxes and excessprofits taxes.

(2) The Federal capital stock tax.

It is mutually agreed that the present Convention shall also apply to any other or additional taxes imposed by either contracting State, subsequent to the date of signature of this Convention, upon substantially the same bases as the taxes enumerated herein. The benefits of this Convention shall and residents of Sweden, to citizens and States of America, and to Swedish or United States corporations and other entities.

accrue only to citizens residents of the United

ARTICLE II

An enterprise of one of the contracting States is not subject to taxation by the other contracting State in respect of its industrial and commercial profits except in respect of such profits allocable to its permanent establishment in the latter State. The income

The Convention received the United States Senate advice and consent to rati

fication on August 2, 1939. Insofar as the Department of Commerce has been able to ascertain at the date of going to press the remaining procedures required are the ratification by the President of the United States, and in the case of Sweden the convention must be ratified by His Majesty the King, with the consent of the Raksdag; then the convention will not become effective until the first day of January following the exchange of ratifications at Stockholm.

thus taxed in the latter State shall be exempt from taxation in the former State.

No account shall be taken in determining the tax in one of the contracting States, and of the mere purchase of merchandise effected therein by an enterprise of the other State.

The competent authorities of the two contracting States may lay down rules by agreement for the apportionment of industrial and commercial profits.

ARTICLE III

When an enterprise of one of the contracting States, by reason of its participation in the management or capital of an enterprise of the other contracting State, makes or imposes on the latter in their commercial or financial relations conditions different from those which would be made with an independent enterprise, any profits which should normally have appeared in the balance sheet of the latter enterprise but which have been in this manner diverted to the former enterprise may, subject to applicable measures of appeal, be incorporated in the taxable profits of the latter enterprise. In such case consequent rectifications may be made in the accounts of the former enterprise.

ARTICLE IV

Income which an enterprise of one of the contracting States derives from the operation of ships or aircraft registered in that State is taxable only in the State in which registered. Income derived by such an enterprise from the operation of ships or aircraft not so registered shall be subject to the provisions of Article II.

ARTICLE V

Income of whatever nature derived from real property, including gains derived from the sale of such property, but not including interest from mortgages or bonds secured by real property, shall be taxable only in the contracting State in which the real property is situated.

ARTICLE VI

Royalties from real property or in respect of the operation of mines, quarries, or other natural resources shall be taxable only in the contracting State in which such property, mines, quarries, or other natural resources are situated.

Other royalties and amounts derived from within one of the contracting States by a resident or by a corporation or other entity of the other contracting State as consideration for the right to use copyrights, patents, secret processes and formulas, trade marks, and other analogous rights, shall be exempt from taxation in the former State.

1.

ARTICLE VII

Dividends shall be taxable only in the contracting State in which the shareholder is resident or, if the shareholder is a