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Part Two
With the veto of the President of the General Tax Amnesty provisions, the TA on delinquent accounts and estate tax in Republic Act 11213 remained.
The TA on delinquent accounts provides a relief for taxpayers who have unresolved tax cases pending collection proceedings in the Bureau of Internal Revenue or unsettled in the judicial courts or Department of Justice. This also covers situations where taxpayers failed to remit to the BIR taxes that they previously withheld from suppliers or employees. Several issuances have been promulgated by the Department of Finance and the BIR for this TA, including Revenue Regulations 4-2018, Revenue Memorandum Circular 23-2019 and 57-2019. It is expected that additonal guidelines will still be issued.
This TA covers all national internal revenue taxes for taxable year 2017 and prior years. I like to categorize the different situations covered in the TA into two. The first category consists of where the BIR has issued Final Assessment Notices or Final Decision on Disputed Assessments that have become final and executory since the taxpayer failed to contest these, administratively or judicially, within the prescribed time period. The BIR considers these as being delinquent accounts and included in its inventory of arrears accounts that amount to over P300 billion to date. The second category includes all other cases that may not have FAN or FDDA becoming final and executory but are considered delinquent under the guidelines. These include criminal cases pending with the DOJ or Prosecutor’s Office or the courts for tax evasion and other criminal offenses, cases with final and executory judgment by the courts; and withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes.
Those availing themselves of the TA on delinquent accounts have until one year from the effectivity of the rules or on April 23, 2020, to complete the payment of the amnesty tax and submit all documentary requirements. The guidelines issued by the BIR and the Tax Amnesty Return (TAR) or BIR Form 2118-DA contain the details of the documentary and procedural requirements.
The first requirement for the first category of tax delinquencies is securing the Certificate of Tax Delinquencies from the concerned BIR Office. The BIR is mandated to submit the CTD to the taxpayer who requests the same within the day of application. The requirements for the second category of TA case are different as prescribed in the guidelines.
The TAR and the Acceptance Payment Form (APF) or BIR Form 0621-DA can be accomplished without too much difficulty. The TA rates for the different cases are the following:
- 40 percent of basic tax for delinquent accounts in the first category;
- 50 percent of basic tax for tax cases subject of final and executory judgment by the courts;
- 60 percent of the basic tax for criminal cases pending with the DOJ/Prosecutor’s office or the courts; or
- 100 percent of the basic tax for unremitted withholding taxes.
Once the TAR and APF are accomplished, these are to be submitted to the concerned BIR Office. The BIR will review and endorse these back to the taxpayer, with the AFP bearing the signature of the authorized BIR officer.
The taxpayer can now proceed with the payment of the amnesty tax to the authorized accredited agent bank or revenue collection office by merely presenting the APF. There is no need to present the TAR or any supporting document to the bank or RCO. Instead, all of the documents, including the TAR, bank validated AFP and supporting documents should be filed in triplicate with the concerned BIR office after the payment. The taxpayer will be given the received copy of all of these documents.
Within 15 calendar days from the submission to the BIR, the Authority to Cancel Assessment shall be issued by the BIR to the taxpayer. The ATCA shall be the basis for the closure of the cases of taxpayers with delinquent accounts. Thereafter, the taxpayer can finally relax knowing that his tax cases are finally settled and henceforth “start clean” with the BIR moving forward.
To be continued
Joel L. Tan-Torres is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010 and the chairman of the Professional Regulatory Board of Accountancy from 2014 to August 2018. He is a partner of Reyes Tacandong & Co.
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