TAX AMNESTY ON DELINQUENCIES (TAD) and VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM (VAPP)
Extension of availment of the following until June 30, 2021 (LAST CALL)
- TAD – 40%-60% of basic tax – VAT and Income Tax and 100% of basic tax – Withholding Tax
- VAPP – 1%-5% of Gross Sales, 5%-9% of Taxable Net Income, or Minimum amount of P75,000 to P1,000,000 based on subscribed capital, whichever is higher.
The Bureau of Internal Revenue (BIR) released revenue regulations to extend deadlines for availment of Tax Amnesty on Delinquencies and Voluntary Assessment and Payment Program from its last extended deadline, December 31, 2020 to June 30, 2021, unless further extended by the Secretary of Finance.
- TAX AMNESTY ON DELINQUENCIES (TAD)
TAD are granted to taxpayers to encourage them in paying all unpaid taxes imposed by the National Government for taxable year 2017 and prior years with respect to estate tax, other internal revenue taxes, and tax on delinquencies.
In a pursuit to enhance revenue administration and collection, the Congress of the Philippines released Republic Act No. 11213 to encourage taxpayers in paying their unpaid taxes. It provides the taxpayers the following:
- Broaden the tax base by offering a general tax assembly for all unpaid internal revenue taxes that will help cleanse, organize, and improve the Bureau of Internal Revenue’s database;
- Enhance revenue collection by providing a tax amnesty on delinquencies that will minimize administrative costs in pursuing tax cases and declog the dockets of the BIR and the courts; and
- Provide a more equitable tax system by adopting a comprehensive tax reform program that will simplify the requirements on tax amnesties with the use of simplified forms, and utilization of information technology in broadening the tax base.
REVENUE REGULATION NO. 4-2019 (IMPLEMENTING RULES AND REGULATIONS OF RA No. 11213)
The said regulation provides guidelines in applying the tax amnesty act. It covers all persons, whether natural or juridical, with internal revenue tax liabilities covering taxable year 2017 and prior years, under any of the following circumstances:
- Delinquent Accounts and assessments which have become final and executory;
- Tax cases subject of final and executory judgment by the courts;
- Pending criminal cases filed with the Department of Justice (DOJ)/ Prosecutor’s Office or the courts for tax evasions and other criminal offenses under Chapter II of Title X and Section 275 of the Tax Code, as amended; and
- Withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes.
The taxpayers are granted 40%-100% of the basic tax assessed.
The RR was published on April 8, 2019 and took effect fifteen (15) days from the date of its publication. The taxpayers were initially given one (1) year from the effectivity of the regulation, or April 23, 2020. However, the deadline was amended through RR 5-2020 which extends it if the circumstances warrant an extension such as in case of country-wide economic or health reason/s. It was further clarified in RR 15-2020 that such deadline will be on December 31, 2020 and was further extended until June 30, 2021 through RR 32-2020.
2. VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM (VAPP)
VAPP are granted to all taxpayers to encourage them in paying possible tax delinquency payments, which could be otherwise be collected through audit and enforcement effort. It is applicable for taxable year 2018 under certain conditions.
Pursuant to Sec. 224 of the National Internal Revenue Code (NIRC) of 1997, in relations to Sections 6 and 204, and other pertinent provisions, the BIR implemented the VAPP Program to provide remedy for enforcement or forfeitures.
REVENUE REGULATION NO. 21-2021
This regulation applies to all internal revenue taxes covering the taxable year ending December 31, 2018, and fiscal year 2018 ending on the last day of the months of July 2018 to July 2019, which includes taxes on one-time transactions (ONETT) such as estate tax, donor’s tax, capital gains tax (CGT), as well as ONETT related creditable withholding tax and documentary stamp tax.
This is available to all taxpayers except the following:
- Those taxpayers who have already been issued a Final Assessment Notice (FAN) that have become final and executory, on or before the effectivity of this RR;
- Persons under investigations as a result of verified information;
- Those with cases involving tax fraud filed and pending in the DOJ or in the courts; and
- Those with pending cases involving tax evasion and other criminal offenses.
Clarifications on certain provisions on certain issues relative to VAPP was addressed in RMC 111-2020.
The RR was published on August 8, 2020 and took effect fifteen (15) days from the date of its publication. The taxpayers were initially given until December 31, 2021 to avail the VAPP. However, the deadline was amended through RR 33-2020 which extends until June 30, 2021.
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