Tax Amnesty – Implementing Rules and Regulations

On 14 February 2019, Republic Act No. 11213 or the “Tax Amnesty Act” was approved and published in the Official Gazette. It became effective on April 24, 2019.

It covers all unpaid internal revenue taxes for taxable year 2017 and years prior to it with respect to (1) Estate Tax Amnesty and (2) Tax Amnesty on Delinquencies.

On 05 April 2019, the Bureau of Internal Revenue (BIR) released Revenue Regulation No. 4-2019 (RR No. 4-2019) or the Implementing Rules and Regulations of the Tax Amnesty on Delinquencies (“IRR of Tax Amnesty on Delinquencies”) with the following basic guidelines:

Who are covered by the IRR of Tax Amnesty on Delinquencies?

The IRR of Tax Amnesty on Delinquencies covers taxpayers with Delinquent Accounts, meaning those arising from Assessment Notices that have become Final and Executory due to (1) failure to pay the tax due on the prescribed due date in the Final Assessment Notice/Formal Letter of Demand and for which no valid Protest has been timely filed from receipt; (2) failure to timely file an appeal before the Court of Tax Appeals or an administrative appeal before the Commissioner of Internal Revenue (CIR); or (3) failure to timely file an appeal from receipt of the Decision of the CIR denying the administrative appeal to the Final Decision on Disputed Assessment.

What are the different types of Delinquent Accounts and how much is required to be paid to avail the amnesty?

Delinquent Accounts

Tax Amnesty Rates

Delinquent Accounts including:

  1. Accounts with application for compromise settlement either on the basis of (a) doubtful validity of the assessment or (b) 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.

40% of the tax due shown on the Assessment Notice, net of any basic tax paid, exclusive of civil penalties.

Taxpayers 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

60% of the computed basic tax liabilities as shown in the criminal complaint filed by the BIR with the DOJ/Prosecutor’s Office or in the information filed in the Courts for violations of tax laws and regulations.

Taxpayers with final and executory judgement by the courts on or before the effectivity of this IRR

50% of the basic tax liabilities as per the Court’s final and executory decision.

Taxpayers who withholding agents who failed to remit withheld taxes

100% of the actual amount of taxes the withholding agent failed to remit.

When can I avail of the Tax Amnesty on Delinquencies?

Availment upon compliance with the list of requirements and procedure is required within one (1) year from 24 April 2019, the effectivity date of the IRR of the Tax Amnesty on Delinquencies.

What happens after the approval of the Tax Amnesty?

Once the requirements and conditions of the IRR on Tax Amnesty on Delinquencies are fully complied with, the tax delinquency is considered settled.

Any criminal case and its corresponding civil or administrative cases, if any, shall be terminated.

The taxpayer shall also be immune from all suits or actions including payment of all delinquency or assessment, as well as additions thereto.

The availment of the Tax Amnesty and the issuance of the Acceptance Payment Form do not imply an admission of criminal civil or administrative liability on the part of the availing taxpayer.

Click here to read the entire text of RA No. 11213 and here to read the entire text of RR No. 4-2019.

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