BIR issues Revenue Regulations for Tax Amnesty on Delinquencies

Authored by Ronald V. Bernas, Maria Ana Camila C. Jacinto-Lagustan and Deodar Lovell C. Bautista

The Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 4-2019 (RR 4-2019) on 5 April 2019. This RR serves as  the Implementing  Rules and Regulations of Republic Act No. 11213, otherwise known as "Tax Amnesty Act."  RR 4-2019 provides the guidelines on the filing and processing of tax amnesty on delinquencies (TAD).

Recent Developments

All persons, whether natural or juridical, with internal revenue tax liabilities covering taxable year 2017 and prior years, may avail of the TAD within one (1) year from the effectivity of the RR (beginning 24 April 2019), under any of the following instances:

A. Delinquent Accounts as of the effectivity of RR 4-2019, including the following: 

1. Delinquent 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.

Delinquent Accounts shall pertain to a tax due from a taxpayer arising from the audit of the BIR which had been issued Assessment Notices that have become final and executory due to the following instances: 

1. Failure to pay the tax due on the prescribed due date provided in the Final Assessment Notice (FAN)lFormal 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; 
2. Failure to file an appeal to the Court of Tax Appeal (CTA) or an administrative appeal before the Commissioner of internal Revenue (CIR) rvithin thirty (30) days from receipt of the decision denying the request foi reinvestigation or reconsideration; or
3. Failure to fiie an appeal to the CTA within thirly (30) days frorn receipt of the Decision of the CIR denying the taxpayer's adrninistrative appeal to the Final Decision on Disputed Assessment (FDDA).

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.

The TAD may be availed of in the following instances and at the following rates:

Nature of Delinquency Tax Amnesty Rate (on the basic tax assessed)
Delinquencies and assessments which have become final and executory 40% 40%
Tax Cases subject of final and executory judgment by the courts 50%
Pending criminal cases with criminal information filed with the Department of Justice or the courts for tax evasion and other criminal offenses under Chapter II, Title X and Section 275 of the Tax Code 60%
Withholding agents who withhold taxes but failed to remit the same to the BIR 100%

Please note that 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.

A Tax Amnesty Return (TAR) (BIR Form No.2118-DA) shall be completely and accurately accomplished and made under oath. The TAR, along with the Acceptance Payment Form (BIR Form No. 0621-DA), and Certificate of Tax Delinquencies/Tax Liabilities, shall be filed with the following BIR offices:

Classification Place of Filing
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)

Actions to Consider

The tax delinquency of those who avail of the TAD under RR 4-2019, upon full compliance with all the conditions, shall be considered settled, and the criminal case in connection therewith and its corresponding civil or administrative case, if applicable, shall be terminated.

As the period for TAD is limited to one year, we advise taxpayers to take advantage of this opportunity to once and for all settle their existing tax delinquencies.