Revenue Memorandum Circular (RMC) No. 57-2019, dated May 22, 2019, clarifies certain issues on the availment of Tax Amnesty on Delinquencies under Revenue Regulations (RR) No. 4-2019 or the Implementing Rules and Regulations of the Tax Amnesty Act of 2019.
- BIR CLARIFIES CERTAIN PROVISIONS ON THE AVAILMENT OF TAX AMNESTY ON DELINQUENCIES
- TAX & BUSINESS-RELATED NEWS [JUNE 10-JUNE 23]
A. BIR CLARIFIES CERTAIN PROVISIONS ON THE AVAILMENT OF TAX AMNESTY ON DELINQUENCIES Revenue Memorandum Circular (RMC) No. 57-2019, dated May 22, 2019, clarifies certain issues on the availment of Tax Amnesty on Delinquencies under Revenue Regulations (RR) No. 4-2019 or the Implementing Rules and Regulations of the Tax Amnesty Act of 2019. It may be recalled that pursuant to the Tax Amnesty Act of 2019, taxpayer with delinquent account covering 2017 and prior years may avail of the tax amnesty on delinquencies. Highlights of the clarifications, categorized per area of concerns, are summarized below:
- Steps On The Availment
- Who May Or May Not Avail, Taxable Base & Rate
- Effects Of Availment On Bir Collection Enforcement
- Administrative Compliance
I. STEPS ON THE AVAILMENT The steps on availment include the following:
- Secure Certificate of Delinquencies/Tax Liabilities from the concerned BIR office
- Accomplish Tax Amnesty Return (TAR) and Acceptance Payment Form (APF) in triplicate copies
- Present TAR together with the Certificate of Delinquencies/Tax Liabilities to the RDO/LTDO for endorsement of APF
- Pay amnesty amount with the authorized agent bank
- Submit to RDO/LTDO a copy of TAR and APF duly received by bank
II. WHO MAY OR MAY NOT AVAIL, TAXABLE BASE & RATE
- Taxpayer can avail tax amnesty even if the tax liabilities pertain only to penalties as a result of late filing/payment or other assessed penalties for non-compliance of reportorial requirements. However, the phrase “no payment required” shall be indicated in the APF.
- Tax liabilities which have become final and executory, on or before April 24, 2019, and covered by a compromise settlement application that was subsequently denied by the Evaluation Board during the one-year availment period, can be covered by tax amnesty availment.
- Taxpayer with denied application for abatement may avail of the tax amnesty. The 100% payment of the basic tax shall be treated as partial payment of the delinquent tax liabilities. No tax amnesty amount shall be reflected in the APF since abatement requires settlement of the 100% of the basic.
- The basis of computation of tax amnesty rate of 40% is the difference of the basic tax assessed less the amount paid as offered in the compromise settlement application. Refund of excess compromise payment over the 40% is not allowed.
- Taxpayer with ongoing tax examination for 2017, pursuant to a Letter of Authority, cannot avail of tax amnesty since the assessment is not yet considered delinquent except in the case of unremitted withholding tax in which the tax amnesty may be availed at any stage provided 100% of the basic shall be paid even in court cases with final and executory judgment. Current audit will proceed and the same shall not be suspended.
- Tax liabilities contained in the Notice for Informal Conference are not yet considered delinquent and cannot be the subject of tax amnesty on delinquencies except when the tax liability pertains to unremitted withheld taxes.
- Failure to comply with the 60-day period to submit documents after the submission of protest letter on FAN/FLD will render the tax liabilities delinquent and therefore qualified for tax amnesty.
- Receipt of FDDA after April 24, 2019, even if dated before April 24, 2019, does not make the account delinquent in view of the protest filed.
- Tax amnesty on delinquencies can be availed of even if there is no FAN/FLD/FDDA that has become final and executory if the tax liabilities are related to the pending criminal cases with the DOJ/Prosecutor’s Office or the courts for tax evasion and those pertaining to unremitted tax withheld by withholding agents.
- If the criminal charge pertains to “failure to obey summons”, legal complaint does not contain assessment of unpaid tax, and such is pending as of April 24, 2019, the basis of the tax amnesty would be the basic tax per such document, based on the best evidence obtainable rule assessment that the legal officer may require the examiner. However, if the assessment becomes final and executory as of April 24, 2019, the tax amnesty rate is 60% based on the basic.
- Pending criminal case of the taxpayer is not automatically terminated once he availed the tax amnesty. There is a need to file a Motion to Dismiss with the DOJ or courts and attach a copy of papers on tax amnesty availment which shall serve as the basis of dismissal of the case.
- Open stop-filer cases are not qualified for the availment of tax amnesty.
- Tax liabilities covered by FAN which was timely protested but subsequently withdrawn on or before April 24, 2019 can be considered delinquent account and therefore qualified for tax amnesty.
- Amended tax return with resulting tax payable is not qualified for availment of tax amnesty.
- Tax amnesty may be availed even if there are already garnished amount if the same are not sufficient to fully settle the delinquent tax liabilities. The garnished amount shall first be applied to penalties before the same shall be applied to basic tax.
- Tax amnesty may be availed even if there are already seized properties if the same are not sufficient to fully settle the delinquent tax liabilities. If there is no public auction conducted yet, the value of seized property shall not be deducted from the taxpayer’s tax liabilities and the amount of tax amnesty shall be based on the basic tax assessed.
In case there is a public auction, the following rules shall apply:
- With winning bidder-the proceeds of auction sale less administrative cost incurred in the conduct of public auction shall be applied first to the penalties before the excess shall be applied to the basic tax.
- Failure of bidding and property was forfeited in favor of the government-the value of the property seized shall not be deducted from the taxpayer’s outstanding tax liabilities.
III. EFFECTS OF TAX AMNESTY ON BIR COLLECTION ENFORCEMENT
- A delinquent taxpayer whose property has been auctioned and sold can still redeem the auctioned property provided that the redemption shall be done within one (1) year from the date of the registration of the Certificate of Sale with the Register of Deeds. He shall be required to pay the bid amount including the interest of 15% per annum computed from the date of sale up to the date of redemption to the winning bidder, through the concerned BIR office following the guidelines and procedures on redemption that the BIR may issue.
If the property was not sold during the public auction resulting to forfeiture in favor of the government for want of bidder, the taxpayer shall present the NIATCA to the concerned BIR office, and pay the administrative cost. However, if the TAR only pertains to a selected tax type and there are still other outstanding tax liabilities, the property cannot be subject to redemption, in general, except if there is payment of administrative cost incurred in the public auction, full settlement of the outstanding tax liabilities, inclusive of delinquency penalties, presentation of the NIATCA for the selected tax types where tax amnesty were availed and presentation of the Lifting Order to the Land Registration Authority/Register of Deeds.
- Notice of Tax Lien (NTL)/Notice of Tax Levy (NOL) in the Transfer Certificate of Title (TCT) shall be lifted and cancelled once the tax amnesty is availed and upon issuance of a Lifting Order.
- Buyer of property, with annotated NTL/NOL as a result of tax delinquency, can avail of the tax amnesty on delinquency. However, he has to follow the regular procedure on the cancellation of tax lien which requires full payment of delinquent tax liabilities.
IV. ADMINISTRATIVE COMPLIANCE
- Tax liabilities not included in the Certificate of Delinquencies/Tax Liabilities issued by the BIR remain outstanding until fully-settled. Otherwise, taxpayer having knowledge of such deficiency can request for Amended Certificate together with a copy of assessment notice and Sworn Declaration of No Protest Filed.
- Taxpayer availing tax amnesty for different taxable years and different tax types may avail using one Tax Amnesty Return. However, depending on the taxpayer’s financial incapacity and priorities, the taxpayer may choose to settle the tax liabilities on a per tax type and per taxable year basis provided the same is done within the one-year availment period. The immunities will only apply to those tax types/taxable period with valid tax amnesty availment.
- Tax amnesty amount cannot be paid on
- Notice of Issuance of Authority to Cancel Assessment (NIATCA) is not sufficient to lift notices of levy and warrants. Lifting orders, which will be issued after the NIATCA is approved, are still required to lift the notices.
TAX & BUSINESS-RELATED NEWS [JUNE 10-23]
- BSP wants to print PH passports again
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- More income for industries in early 2019
- Excise awaits entry of popular Juul e-cigarettes
- SSS releases P1B in pension loans
- Estate tax amnesty scheme starts today
- SEC freezes P100-M KAPA funds
- SEC raises alarm over growing investment scams perpetuated by religious groups
- Pag-IBIG gets 7th highest CoA opinion
- Dominguez pushes rest of tax reforms
- SSS allots P7B for IRF managers
- ‘Longer maternity leaves means firms need contingency plans’
- SSS taps RCBC to manage P1-B investments
BSP wants to print PH passports again [Manila Bulletin, June 23, 2019]
The Bangko Sentral ng Pilipinas (BSP) wants to take back the printing of the country’s passports or e-passports, along with the generation of the national identification or ID card.
Pagcor to POGOs: Pay proper taxes [Manila Bulletin, June 23, 2019]
State-run Philippine Amusement and Gaming Corp., (Pagcor) has issued a stern warning against errant offshore gaming operators to strictly comply with government regulations and pay proper taxes, saying concerned tax agencies are closely monitoring how they conduct business in the country.
Law requires OFWs to contribute to SSS [Manila Bulletin, June 22, 2019]
State-run Social Security System (SSS) stressed that the pension fund is duty-bound to implement the mandatory coverage for overseas Filipino workers (OFWs).
More income for industries in early 2019 [Philippine Daily Inquirer, June 20, 2019]
According to a report of the Philippine Statistics Authority (PSA), the finance, real estate, trade and transportation sectors enjoyed a combined increase in gross income in the three months if 2019 which was 8.1 percent higher than the same period in 2018.
Excise awaits entry of popular Juul e-cigarettes [Philippine Daily Inquirer, June 20, 2019]
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SSS releases P1B in pension loans [Manila Times, June 17, 2019]
Pension loans released under the Pension Loan Program (PLP) of the Social Security System (SSS) reached more than P1 billion as of May 27.
Estate tax amnesty scheme starts today [Philippine Daily Inquirer, June 17, 2019]
The Bureau of Internal Revenue (BIR) today starts accepting applications for the much-awaited reprieve for heirs who have yet to pay the taxes due from their deceased loved ones’ estate.
SEC freezes P100-M KAPA funds [Manila Bulletin, June 16, 2019]
The Securities and Exchange Commission (SEC) has locked in more than P100 million worth of assets linked to Kapa-Community Ministry International, Inc. (KAPA) under a freeze order issued by the Court of Appeals (CA).
SEC raises alarm over growing investment scams perpetuated by religious groups [Philippine Star, June 14, 2019]
The Securities and Exchange Commission (SEC) has raised the alarm bells over the apparent growing number of investment scams perpetuated by religious leaders
Pag-IBIG gets 7th highest CoA opinion [Manila Times, June 13, 2019]
STATE-RUN Home Development Mutual Fund (HDMF or Pag-IBIG Fund) has earned its seventh consecutive highest opinion from state auditors, setting yet another record in the Fund’s 38-year history.
Dominguez pushes rest of tax reforms [Manila Times, June 12, 2019]
The Department of Finance (DOF) vowed to speed up the approval of the remaining tax reform packages of the Duterte administration along with other legislative proposals through better engagement with the members of the incoming Congress.
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THE Social Security System (SSS) announced on Sunday that it had hired local fund managers to manage P7 billion of its Investment Reserve Fund (IRF).
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The newly enacted Expanded Maternity Leave Act, which grants mothers over three months of paid leave, should prompt companies to pay close attention to their business continuity plan especially if their employees are looking to raise a family soon.
SSS taps RCBC to manage P1-B investments [Manila Bulletin, June 10, 2019]
Rizal Commercial Banking Corporation (RCBC) has been tapped by the Social Security System (SSS) to manage P1 billion worth of funds in its portfolio, for investment in both fixed-income securities and equities, in the next two years.
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