Published — June 1, 2022
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
What is a Tax Amnesty?
A tax amnesty is a general pardon or the intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of violating a tax law. It partakes of an absolute waiver by the government of its right to collect what is due it and to give tax evaders who wish to relent a chance to start with a clean slate (Asia International Auctioneers, Inc.,v. Commissioner of Internal Revenue, G.R. No. 179115, September 26, 2012).
Who may Avail the Tax Amnesty on Delinquencies?
All persons, whether natural or juridical, with internal revenue tax liabilities covering taxable year 2017 and prior years, may avail of Tax Amnesty on Delinquencies until April 23, 2020, under any of the following instances:
A. Delinquent Accounts as of the effectivity of these Regulations, including the following:
1. Delinquent Accounts with application for compromise settlement either on the basis of:
- doubtful validity of the assessment or
- financial incapacity of the taxpayer, whether the same was denied by or still pending with the Regional Evaluation Board (REB) or the National Evaluation Board (NEB), as the case may be, on or before the effectivity of these Regulations;
2. Delinquent Withholding Tax liabilities arising from non-withholding of tax; and
3. Delinquent Estate tax liabilities.
B. With pending criminal cases with the DOJ/ Prosecutor’s Office or the courts for tax evasion and other criminal offenses under Chapter II of Title X and Section 275 of the Tax Code, as amended with or without assessments duly issued;
C. With final and executory judgment by the courts on or before the effectivity of these Regulations; and
D. Withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes.
What is a Delinquent Account?
Delinquent Account shall pertain to a tax due from a taxpayer arising from the audit of the Bureau of Internal Revenue (BIR) which had been issued Assessment Notices that have become final and executory due to the following instances:
- Failure to pay the tax due on the prescribed due date provided in the Final Assessment Notice (FAN)/ Formal Letter of Demand (FLD) and for which no valid Protest, whether a request for reconsideration or reinvestigation, has been filed within thirty (30) days from receipt thereof;
- Failure to file an appeal to the Court of Tax Appeal (CTA) or an administrative appeal before the Commissioner of Internal Revenue (CIR) within thirty (30) days from receipt of the decision denying the request for reinvestigation or reconsideration; or
- Failure to file an appeal to the CTA within thirty (30) days from receipt of the Decision of the CIR denying the taxpayer’s administrative appeal to the Final Decision on Disputed Assessment (FDDA).
What is the Tax Amnesty Rate?
| A. Delinquent accounts and assessments which have become final and executory | 40% of the basic tax assessed |
| B. Tax cases subject of final and executory judgment by the courts | 50% of the basic tax assessed |
| C. Pending criminal cases filed with the DOJ, Prosecutor’s Office or the courts for tax evasion and other criminal offenses under Chapter II of Title X and Section 275 of the Tax Code, as amended | 60% of the basic tax assessed |
| D. Withholding agents who withheld taxes but failed to remit the same to the Bureau | 100% of the basic tax assessed |
The tax amnesty rate of one hundred percent (100%) provided in letter (D) shall apply in all cases of non-remittance of withholding taxes, even if the same shall fall under letters (A), (B) or (C) above.
In cases where the delinquent taxes have been the subject of application for compromise settlement, whether denied or pending, the amount of payment shall be based on the net basic tax as certified by the concerned office.
What Is the Manner of Availment Of Tax Amnesty on Tax Delinquencies?
Any person, whether natural or juridical, who wishes to avail of the Tax Amnesty on Delinquencies shall file within one (1) year from the effectivity of these Regulations or until April 23, 2020, an application therefor in accordance with the procedures set forth below.
A. DOCUMENTARY REQUIREMENT:
The taxpayer shall submit the following:
- Tax Amnesty Return (TAR) (BIR Form No.2118-DA) completely and accurately accomplished and made under oath;
- Acceptance Payment Form (APF) (BIR Form No. 0621-DA) duly validated by the Authorized Agent Banks (AABs) or APF duly stamped “received” with accompanying bank deposit slip duly validated by the concerned AABs or Revenue Official Receipt (ROR) issued by the Revenue Collection Officers (RCOs);
- Certificate of Tax Delinquencies/Tax Liabilities issued by concerned BIR offices; and
- In case of Delinquent Withholding Tax liabilities arising from non-withholding of tax, a copy of the assessment found in the FAN/FDDA:
Provided that, in cases of Withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes, either delinquent account or not, with or without FAN/FDDA, the Preliminary Assessment Notice (PAN) / Notice for Informal Conference or equivalent document is sufficient.
B. PLACE OF FILING –
The Tax Amnesty Return and other documentary requirements shall be filed with the following BIR offices:
| Classification | Place of Filings |
| Non-Large Taxpayers | Revenue District Office (RDO) where applicant-taxpayer is registered |
| Large Taxpayers – Cebu or Davao | Large Taxpayers Division (LTD) Office where applicant- taxpayer is registered |
| Large Taxpayers – Excise and Regular | Large Taxpayers Collection Enforcement Division (LTCED) |
What shall the taxpayer do to avail of the tax amnesty on delinquencies?
Step 1.
Secure the Certificate of Delinquencies/Tax Liabilities (CTD) from the concerned BIR Office.
Step 2.
Present the duly accomplished Tax Amnesty Return (TAR) made under oath and Acceptance Payment Form (APF), together with other required documents, to the concerned RDO/LTD/LTCED for endorsement of the APF and pay the amnesty amount with the AABs or RCOs, whichever is applicable, by presenting the RDO/ LTD/ LTCED -endorsed or approved APF.
Provided, that if no payment is required as in the case when assessment consists only of unpaid penalties due to either late filing/payment or other assessed penalties for non-compliance of reportorial requirements, the phrase “no payment required” shall be indicated in the APF.
Step 3.
Submit/file immediately to the RDO/LTD/LTCED where the taxpayer is registered, in triplicate copies, the duly accomplished TAR, made under oath, together with the complete documentary requirements and proof of payment, within five (5) days from receipt of the endorsed APF, which in no case shall be beyond the one (1) year availment period. The taxpayer/applicant shall be furnished with a copy, stamped as received, of said TAR and APF.
Availment of Tax Amnesty on Delinquencies shall be considered fully complied with upon completion of the above enumerated steps within the one (1) year availment period.
What Are The Immunities And Privileges Of Availing Tax Amnesty On Tax Delinquencies?
The tax delinquency of those who avail of the Tax Amnesty on Delinquencies under these Regulations, upon full compliance with all the conditions set forth hereof, shall be considered settled, and the criminal case in connection therewith and its corresponding civil or administrative case, if applicable, shall be terminated. The taxpayer shall be immune from all suits or actions, including the payment of said delinquency or assessment, as well as additions thereto, and from all appurtenant civil, criminal and administrative cases, and penalties under the 1997 Tax Code, as amended, as such relate to the internal revenue taxes for taxable years that are subject of the tax amnesty availed of.
If the assessment notices pertain to penalties only (i.e. without basic tax assessed), can the taxpayer avail of the tax amnesty?
Yes, the taxpayer can avail of the tax amnesty if the penalties pertain to taxable year 2017 and prior years
and the assessment notices have become final and executory on or before April
24, 2019.
The
taxpayer shall follow the prescribed manner of availment. However, since the required tax amnesty
amount is based on the basic tax assessed, there shall be no amount due for
payment.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
All rights reserved.
SUBSCRIBE NOW FOR MORE LEGAL UPDATES!
[email-subscribers-form id=”4″]