PENALTIES
CIVIL PENALTIES
The NIRC of 1997, as amended, governs the rules on assessment of national internal revenue taxes;
civil penalties and interest; and the extrajudicial settlement of a taxpayer's criminal violation of the
Code through payment of a suggested compromise penalty. Civil penalties, interests, and suggested
compromise penalties are discussed in this chapter.
The additions to the tax or deficiency tax shall apply to all taxes, fees and charges imposed under the
Code. The amount so added to the tax shall be collected at the same time, in the same manner and as
part of the subject tax.
A revenue tax is considered delinquent when it is unpaid after the lapse of the last day prescribed by
law for its payment. Likewise, it could also be considered as delinquent where an assessment for
deficiency tax has become final and the taxpayer has not paid it within the period given in the notice
of assessment.
SURCHARGE
1. A surcharge of 25% of the tax due is imposed in the following cases:
a. Failure to file any return and pay the amount of tax or installment due on or before the due date.
b. Unless otherwise authorized by the Commissioner, filing a return with a person or office other than
those with whom it is required to be filed.
c. Failure to pay the full or part of the amount of tax shown on the return, or the full amount of tax
due for which no return is required to be filed on or before the due date.
d. Failure to pay the deficiency tax within the time prescribed for its payment in the notice of
assessment.
2. A surcharge of 50% of the tax or of the deficiency tax, in case any payment has been made on the
basis of such return before the discovery of the falsity or fraud, for each of the following violations:
a. Willful neglect to file the return within the period prescribed by the Tax Code or by rules and
regulations; or
b. In case a false or fraudulent return is willfully made.
INTEREST¹
Rate of Interest. There shall be assessed and collected on any unpaid amount of tax, interest at the
rate of double the effective legal interest rate for loans or forbearance of any money in the absence
of an express stipulation as set by the Bangko Sentral ng Pilipinas (BSP) from the date prescribed for
payment until the amount is fully paid.
The rate of interest per BSP Memorandum 799 series of 2013 for loans or forbearance of any money
in the absence of an express stipulation is 6%. Thus, the rate of legal interest imposable under Section
249 of the Tax Code, as amended, shall be 12%. A Circular shall be issued by the Commissioner in case
BSP prescribes new rate of interest.
Deficiency Interest. Interest imposed on any deficiency tax due, which interest shall be assessed and
collected from the date prescribed for its payment until: (a) full payment thereof, or (b) upon
issuance of a notice and demand by the Commissioner or his authorized representative, whichever
comes first.
Delinquency Interest. - Interest imposed on the failure to pay:
(1) The amount of the tax due on any return to be filed; or
(2) The amount of the tax due for which no return is required; or
(3) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and
demand of the Commissioner or his authorized representative until the amount is fully paid, which
interest shall form part of the tax.
No Double Imposition of Interest. Upon the effectivity of the TRAIN Law, in no case shall the
deficiency and delinquency interest prescribed herein be imposed simultaneously.
Illustration 1. Mr. A has been assessed deficiency income tax of P1,000,000.00, exclusive of interest
and surcharge, for taxable year 2018. The tax liability has remained unpaid despite the lapse of June
30, 2020, the deadline for payment stated in the notice and demand issued by the Commissioner,
Payment was made by the taxpayer on Feb. 10, 2021. The applicable interest shall be computed as
follows:
Basic Tax Due-Income Tax P1,000,000.00
Add: 25% Surcharge for Late Payment P250,000.00
12% Deficiency Interest from 04/16/2019 to 06/30/2020 (442 days) 145,315.07 395,315.07
Total Amount Due, June 30, 2020 P1,395,315.07
Add: 12% Delinquency Interest from 07/01/2020 to 02/10/2021
(225 days; based on total amount due of P1,395,315.07 as of 06/30/2020) 103,215.09
Total Amount Due, Feb. 10, 2021 P1,498,530.16
Transitory Provision. - In cases where the tax liability/ies or deficiency tax/es became due before the
effectivity of the TRAIN Law on Jan. 1, 2018, and where the full payment thereof will only be
accomplished after the said effectivity date, the interest rates shall be applied as follows:
Period Applicable Interest Type and Rate
● For the period up to Dec. 31, 2017 -Deficiency and/or Delinquency Interest at 20%
● For the period Jan. 1, 2018 until
full payment of the tax liability -Deficiency and/or Delinquency Interest at 12%
The double imposition of both deficiency and delinquency interest under Section 249 prior to its
amendment will still apply in so far as the period between the date prescribed for payment until Dec.
31, 2017.
Illustration 2. A Company has been assessed deficiency income tax of P1,000,000.00, exclusive of
interest and surcharge, for taxable year 2015. The tax liability has remained unpaid despite the lapse
of June 30, 2017, the deadline for payment stated in the notice and demand issued by the
Commissioner. Payment was made by the taxpayer only on Feb. 10, 2018. The civil penalties for late
payment shall be computed as follows:
Basic Tax Due-Income Tax P1,000,000.00
Add: 25% Surcharge for Late Payment P250,000.00
20% Deficiency Interest from 04/16/2016 to 06/30/2017 (441 days) 241,643.84 491,643.84
Total Amount Due, June 30, 2020 P1,491,643.84
Add:
---20% Deficiency Interest from 07/01/2017 to 12/31/2017
(184 days; based on basic tax of P1,000.000.00) P100,821.92
---20% Delinquency Interest from 07/01/2017 to 12/31/2017
(184 days total, based on total amount due of P1,491,643.84
as of 06/30/2017) 150,390.39
---12% Delinquency Interest from 01/01/2018 to 02/10/2018
(41 days; based on total amount due of P1,491,643.84 as of 06/30/2017) 20,106.54 271,318.85
Total Amount Due, Feb. 10, 2018 P1,762962.69
ILLUSTRATIONS
Late Filing and Late Payment of the Tax
Income tax return for the calendar year 2018 was due for filing on Apr. 15, 2019 but the taxpayer
voluntarily filed his tax return, without notice from the BIR, only on June 30, 2019. The tax due per
return amounts to P100,000. In this case, the taxpayer shall be liable for delinquency penalties
consisting of 25% surcharge, plus 12% interest per annum computed from the due date of the tax
until date of payment, computed as follows:
Income Tax Due Per Return (For CY2018) P100,000.00
Add: 25% Surcharge(25% x P100,000) P25,000.00
12% Del. Interest Per Annum from 4/15/2019 to
6/30/2019 (76/365 x 12% x P100,000) 2,498.63 27,4398.63
Total Amount Due (excluding Suggested Compromise
for Late Filing and Late Payment of the Tax) P127,498.63
Only one 25% surcharge shall be imposed for late filing of the return and late payment of the tax.
Note: In the previous illustration and in the succeeding ones, exact interest using actual time shall be
adopted in determining the time period the interest is to run. Thus, there are 76 days from April 15 to
June 30, 2019 (15 in April, 31 in May and 30 in June). Exact interest uses 365 days as time
denominator.
Filing on Time But with the Wrong Internal Revenue Office
The taxpayer's 2018 income tax return is required to be filed through the authorized agent bank
under the jurisdiction of RDO East Makati. But, without prior authorization from the BIR, the taxpayer
filed his tax return and paid the tax through the authorized agent bank under the jurisdiction of RDO
Davao City. Tax due and paid per return is P100,000.
Income Tax Due Per Return (for CY2018) P100,000
Add: 25% Surcharge (25% X P100,000) 25,000
Total Amount Due P125,000
Less: Amount Paid 100,000
Amount Still Due P 25,000
Late Filing and Late Payment Due to Taxpayer's Willful Neglect
The taxpayer did not file his income tax return for the calendar year 2018 which was due for filing on
Apr. 15, 2019. He was notified by the BIR of his failure to file the tax return, for which reason, he filed
his tax return and paid the tax, only after the said notice, on June 30, 2020. The tax due per return is
P100,000.
Income Tax Due Per Return (For CY2018) P100,000.00
Add: 50% for Willful Neglect to File and Pay (50% x P100,000) P50,000.00
12% Del. Interest Per Annum from 4/15/2019 to
6/30/2020 (442/366 x 12% x P100,000) 14,491.80 64,491.80
Total Amount Due (excluding Suggested Compromise for
Late Filing and Late Payment of the Tax) P164,491.80
Penalty For Deficiency Tax
Illustration 1: Taxpayer filed on time his income tax return for calendar year 2018 and paid P100,000
on Apr. 15, 2019. Upon pre-audit of his return, it was disclosed that he erroneously computed the tax
due. The correct amount of tax due is P120,000. The taxpayer is assessed for deficiency income tax in
a letter of demand and assessment notice issued on June 30, 2020.
Income Tax Due Per Pre-Audit (For CY2018) P120,000.00
Less: Amount Assessed and Paid Per Tax Return 100,000.00
Filed Deficiency Income Tax 20,000.00
Add: 12% Def. Interest Per Annum from 4/15/2019 to
6/30/2020 (442/365 x 12% x P20,000) 2,906.30
Amount Still Due P 22,906.30
Illustration 2: ABC Corporation filed its final adjustment income tax return for calendar year 2018 and
paid on time its income tax shown thereunder, amounting to P100,000. Said taxpayer was
investigated. Upon verification of its accounting records, it was disclosed that its deduction, from
gross income, of representation expenses in the amount of P200,000 did not meet all the statutory
requisites for deductibility. The corporation was duly notified of the said discrepancy through a
Preliminary Assessment Notice. Based on the income tax rate on corporations applicable in the year
2018, the income tax due after investigation amounts to P170,000. After deduction of income tax
paid per return filed, the basic deficiency income tax amounts to P70,000, excluding penalties. Failing
to protest on time against the preliminary assessment notice, a formal letter of demand assessment
notice was issued on May 31, 2020, requiring payment of the assessment not later than June 30,
2020.
Income Tax Due Per Investigation (For CY2018) P170,000.00
Less: Income Tax Paid Per Return 100,000.00
Deficiency Income Tax P 70,000.00
Add: 12% Def. Interest Per Annum from 4/15/2019 to
6/30/2020 (442/365 x 12% x P70,000) 10,172.05
Total Amount Still Due P 80,172.05
Illustration 3:
XYZ Corp. filed its final adjustment income tax return for calendar year 2018 with a net taxable
income of P583,333. At the applicable income tax rate of 30% for the year 2018, its income tax
amounted to P175,000. However, upon investigation, it was disclosed that its income tax return was
false or fraudulent because it did not report a taxable income amounting to another P583,333. On its
net income of P1,166,666, per investigation, the income tax due is P350,000. Deducting its payment
per return filed, the deficiency, excluding penalties, amounted to P175,000. It was duly informed of
this finding through a Preliminary Assessment Notice. Failing to protest on time against the
preliminary assessment notice, a formal letter of demand and assessment notice was issued on May
31, 2020 calling for payment of the deficiency income tax on or before June 30, 2020.
In this case, said corporation is liable for the civil penalties of 50% surcharge for having filed a false or
fraudulent return, plus 12% interest per annum on the deficiency, computed as follows:
Income Tax Due Per Investigation (For CY2018) P350,000.00
Less: Income Tax Paid Per Return 175,000.00
Deficiency Income Tax P175,000.00
Add: 50% Surcharge for Filing a False Return (50% X P175,000) P87,500.00
12% Def. Interest Per Annum from 4/15/2019 to
6/30/2020 (442/365 x 12% x P175,000) 25,430.14 112,930.14
Total Amount Still Due P287,930.14
Late Payment of Deficiency Tax Assessed
In general, the deficiency tax assessed shall be paid by the taxpayer within the time prescribed in the
notice and demand, otherwise, such taxpayer shall be liable for the civil penalties incident to late
payment.
Based on the above illustration, assuming that the calendar year deficiency income tax assessment
against XYZ Corp., in the amount of P287,930.14 is not paid by June 30, 2020, the deadline for
payment of the assessment, and assuming further that this assessment has already become final and
collectible. In this case, such corporation shall be considered late in payment of the said assessment.
Assuming, further, that the corporation pays its tax assessment only by July 31, 2020, the delinquency
interest for late payment shall be computed as follows:
Income Tax Due Per Investigation (For CY2018) P350,000.00
Less: Income Tax Paid Per Return 175,000.00
Deficiency Income Tax P175,000.00
Add: 50% Surcharge for Filing a False Return
(50% x P175,000) P87,500.00
12% Def. Interest Per Annum from 4/15/2019 to
7/31/2020 (442/365 × 12% x P175,000) 25,430.14 112,930.14
Total Amount Still Due P287,930.14
Add: 12% Delinquency Interest from 7/1/2020 to
7/31/2020 (30/365 x 12% x P287,930.14) 2,839.86
Total Amount Due (excluding Suggested Compromise for Late
Payment of the Tax) P290,700.00
Deficiency interest on any deficiency tax is computed from the date prescribed for payment of the tax
until the deadline for payment of the assessment. Delinquency interest may also be imposed and is
computed from the due date appearing in the assessment notice until full payment thereof.
12% Interest Per Annum In Case of Partial or Installment Payment of a Tax Liability
Illustration 1: In case extended payment of the tax is duly authorized.
DEF Corporation, due to financial incapacity, requested for a permit to pay its income tax liability per
return for calendar year 2018, in the amount of P1,000,000, in four monthly installments, starting
Apr. 15, 2019. Its request has been duly approved.
In this case, no 25% surcharge shall be imposed for payment of the tax since its deadline for payment
has been duly extended. However, 12% interest per annum shall be imposed, computed based on the
unpaid amount. This is also consistent with the provisions of the Civil Code which provides: "If the
debt produces interest, payment of the principal shall not be deemed to have been made until the
interest have been covered." Hence, computation of the interest shall be based on the diminishing
balance or unpaid amount of the tax, inclusive of the interests.
No 25% surcharge on extended payment shall be imposed provided, however, that the taxpayer's
request for extension of the period within which to pay is made on or before the deadline for
payment of the tax due. Conversely, if such request is made after the deadline for payment, the
taxpayer shall already be treated late in payment in which case, the 25% surcharge shall be imposed,
even if payment of the delinquency be allowed in partial amortization.
Example: For calendar year 2018:
Income Tax Due Per Return P1,000,000.00
Less: 1 Installment of the Tax on or Before 4/15/2019 250,000.00
Balance As of 4/15/2019 P750,000.00
Add: 12% Del. Interest Per Annum from 4/15/2019 to
5/15/2019 (30/365 x 12% x P750,000) 7,397.26
Amount Due on 5/15/2019 P757,397.26
Less: 2nd Installment on 5/15/2019
(P250,000+P7,397.26) 257,397.26
Balance As of 5/15/2019 P500,000.00
Add: 12% Interest Per Annum from 5/15/2019 to
6/15/2019 (30/365 X 12% x P500.000) 4,931.51
Amount Due on 6/15/2019 P504,931.51
Less: 3rd Installment on 6/15/2019 (P250,000+P4,931.51) 254,931.51
Balance As of 6/15/2019 P250,000.00
Add: 12% Interest Per Annum from 6/15/2019 to
7/15/2019(30/365X12%x P250,000) 2,465.75
4th and Final Installment on 7/15/2019 P252.465.75
Illustration 2: Computation of tax delinquency in case of partial payment of the tax due without prior
BIR permit for extended payment.
GHI Corporation did not file its final adjustment income tax return for the calendar year 2018 which
was due on Apr. 15, 2019. The BIR informed the corporation of its failure to file its said tax return and
required that it file the same, inclusive of the 25% surcharge and 12% interest per annum penalties
incident to the said omission. On May 15, 2019, it advised its income tax due for the said year
amounts to P1,000,000 but, however, due to its adverse financial condition at the moment it will be
unable to pay the entire a month, inclusive of the delinquency penalties. Hence, on May 15, 2019, it
made a partial payment of P400,000. Assuming that the BIR demanded payment of the unpaid
balance of its tax obligation payable by June 15, 2019, the unpaid balance of the corporation's
delinquent income tax shall be computed as follows:
Income Tax Due Per Return P1,000,000.00
Add: 25% Surcharge for Late Filing and Late Payment P250,000.00
12% Del. Interest Per Annum from 4/15/2019 to
5/15/2019(30/365x12%xP1,000,000) 9,863.01 P259,863.01
Amount Due as of 5/15/2019 P1,259,863.01
Less: Partial Payment on 5/15/2019 400,000.00
Balance As of 5/15/2019 P 859,863.01
Add: 12% Interest Per Annum from 5/15/2019 to
6/15/2019 (30/365 x 12% x P859,863.01) 8,480.84
Amount Still Due P 868,343.85
If the said taxpayer fails to pay the amount of P868,343.85 by June 15, 2019, no further 25%
surcharge for late payment of the tax shall be imposed. Instead, only the 12% interest per annum
shall be imposed, computed from due date thereof (1.e., June 15, 2019) until paid. If said taxpayer
pays the same on partial payment basis, the 12% interest per annum shall be computed on the
diminishing balance thereof.
Illustration. Source: BIR Ruling 82-99, June 22, 1999
Phillips Export Industries, Inc, wrote the BIR on April 27, 1999 requesting for the waiver of the
surcharge and interest imposed on Phillips due to late payment of 1998 income tax. It appears that
Phillips filed its tentative 1998 income tax return last April 15, 1999 and paid the amount of
P15,476.15 instead of P1537,615.31 as a result of typographical error in that rush hour of bank closing
time to cope up with the deadline. Its auditors are now finalizing the financial statements and will be
filing the final income tax return very soon. Phillips claims that it filed the tentative returns on the due
date in good faith but after the tax filing day it found out that there was an error in the amount paid
and that it is presently experiencing financial difficulties.
In reply, the BIR informed Phillips that under Section 248(A)(1) & (3) and Section 249, both of the Tax
Code of 1997, the imposition of the surcharge and interest on delinquency is mandatory. Strong
reasons of policy support a strict observance of the rule regarding the payment of tax. The laws
imposing penalties for delinquencies are clearly intended to hasten tax payments or punish evasions
or neglect of duty in respect thereof. If delays in tax payments are to be condoned for light reasons,
the law imposing penalties for delinquencies would be rendered nugatory and the maintenance of the
government and its multifarious activities would be as precarious as taxpayers are willing or unwilling
to pay their obligations to the state on time (Jamora vs. Meer, 74 Phils. 22).
According to BIR, it would appear from Phillips' representations that it filed its 1998 income tax return
and paid the taxes thereon merely for the sake of beating the deadline. This shows lack of good faith
on its part and neglect of its duty in respect of payment taxes on time. The request for waiver of
surcharges and interest on Phillips' deficiency taxes was not granted.
CRIMINAL PENALTIES
The fines to be imposed for any violation of the Code shall not be lower than P30,000 or twice the
amount of taxes, interest, and surcharges due from the taxpayer, whichever is higher.
Any person convicted of a crime penalized by the Code shall be liable not only for the payment of the
tax but for the penalties imposed as well. Any person who willfully aids or abets in the commission of
such crime or who causes the commission of any offense by another, shall be equally liable as the
principal.
If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the
sentence without further proceedings for deportation. If he is a public officer or employee, the
maximum penalty prescribed for the offense shall be imposed and, in addition, he shall be dismissed
from public service and shall be perpetually disqualified from holding any public office. He is
likewise disqualified to vote and participate in any election.
If the offender is a Certified Public Accountant (CPA), his certificate as CPA shall, upon conviction, be
automatically revoked or cancelled. In the case of associations, partnerships or corporations, the
penalty shall be imposed on the partner, president, general manager, branch manager, treasurer,
officer-in-charge, and employees responsible for the violation.
Any person who willfully attempts to evade tax under the Code shall, upon conviction and in addition
to other penalties under the law, be fined for not less than P30,000 but not more than P100,000 and
shall suffer imprisonment of not less than 2 years but not more than 4 years. The conviction or
acquittal obtained shall not be a bar to the filing of a civil suit for the collection of taxes.
COMPROMISE PENALTIES
All criminal violations may be compromised except:
1. those already filed in court; or
2. those involving fraud (Sec. 204 NIRC).
This means that the taxpayer's criminal liability arising from his violation of the pertinent provision of
the Code shall be settled extra-judicially instead of the BIR instituting a criminal action, in Court,
against the taxpayer. A compromise in extra- judicial settlement of the taxpayer's criminal liability for
his violation is consensual in character, hence, may not be imposed on the taxpayer without his
consent. The BIR may only suggest settlement of the taxpayer's liability through a compromise.
The compromise penalty and the amount thereof shall conform with the revised consolidated
schedule of compromise penalties provided under Revenue Memorandum Order 7-2015.
Cases involving fraud shall be referred to the concerned Division having jurisdiction over the case, for
the institution of the corresponding criminal action.
In no case shall the compromise penalty differ in amount from those specified in the schedule, except
when duly approved by the CIR or concerned Deputy Commissioner, or in proper cases, by the
Regional Directors.
Although all amounts of compromise penalties incident to violations shall be itemized in the
assessment notice and/or demand letter, the same should not form part of the assessment notice
that reflects deficiency basic tax, surcharge and interest, but should appear in a separate assessment
notice/demand letter as the amount suggested to the taxpayer to pay in lieu of criminal prosecution.
Since compromise penalties are only amounts suggested in settlement of criminal Bability, and may
not, therefore, be imposed or exacted on the taxpayer, the violation shall be referred to the
appropriate office for criminal action in case of refusal by the taxpayer to pay the suggested
compromise penalty.
The Commissioner or his duly authorized representative is not prevented from accepting a
compromise amount higher than what is provided in the schedule. A compromise offer lower than the
prescribed amount may be accepted after approval by the Commissioner of Internal Revenue or the
concerned Deputy Commissioner, Assistant Commissioner, Regional Director.
The compromise offer shall be paid by the taxpayer upon filing of the application for compromise
settlement. No application for compromise settlement shall be processed without the full settlement
of the offered amount. In case of disapproval of the application for compromise settlement, the
amount paid upon filing of the aforesaid application shall be deducted from the total outstanding tax
liabilities (RR 9-2013, May 10, 2013).
GUIDELINES ON THE PROCESSING OF TAX AMNESTY APPLICATION ON TAX DELINQUENCIES
SCOPE. Pursuant to the provisions of Section 244 in relation to Section 245 of the 1997 Tax Code, as
amended, and Section 27 of Republic Act 11213, these Regulations are hereby promulgated to
implement the provisions on Tax Amnesty on Delinquencies under Title IV of the Tax Amnesty Act.
DEFINITION OF TERMS. For purposes of these Regulations, the words used herein shall be defined as
follows:
A. Delinquent Account - shall pertain to a tax due from a taxpayer arising from the audit of the Bureau
of Internal Revenue (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)/Formal Letter of Demand (FLD) and for which no valid Protest, whether a request for
reconsideration or reinvestigation, has been filed within 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) within 30 days from receipt of the decision denying the
request for reinvestigation or reconsideration, or
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3. Failure to file an appeal to the CTA within 30 days from receipt of the Decision of the CIR denying
the taxpayer's administrative appeal to the Final Decision on Disputed Assessment (FDDA).
B. Assessment Notice - refers to a notice issued to a taxpayer stating the amount and basis of the
deficiency tax assessed. This term includes FAN/FLD and FDDA;
C. Basic Tax Assessed - The term refers to any of the following:
1. Tax due shown on the Assessment Notice, net of any basic tax paid prior to the effectivity of these
Regulations, exclusive of civil penalties;
2. The computed basic tax liabilities as shown in the criminal complaint filed by the BIR with the
Department of Justice (DOJ)/Prosecutor's Office or in the information filed in the Courts for violations
of tax laws and regulations; and
3. The basic tax liabilities as per Court's firial and executory decision.
D. Criminal Cases refer to cases involving crimes and other offenses defined and enumerated under
Chapter II of Title X and Section 275 of the 1997 Tax Code, as amended.
E. Withholding Agent is a person required to withhold, account for, and remit within the prescribed
period any tax imposed by the 1997 Tax Code, as amended,
COVERAGE. All persons, whether natural or juridical, with delinquent internal revenue tax liabilities
covering taxable year 2017 and prior years, may avail of Tax Amnesty on Delinquencies within one (1)
year from the effectivity of Rev. Reg. 4-2019 or until Dec. 31, 2020, under any of the instances listed
below. However, the said date may be extended if the circumstances warrant an extension such as in
case of country-wide economic or health reasons. (Rev. Reg. 5-2020)
A. Delinquent Accounts, whether without or with application for compromise settlement, either on
the basis of (a) doubtful validity of the assessment or (b) financial incapacity of the taxpayer and the
same was denied by or still pending with the Regional Evaluation Board (REB) of the National
Evaluation Board (NEB), as the case may be;
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 IX and Section 275 of the Tax Code, as amended, with
or without assessments duly issued;
C. With final and executory judgment by the courts; and
D. Withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes.
(RMC 57-2019)
TAX AMNESTY RATES. The tax amnesty rates shall be as follows:
A. Delinquent accounts and assessments which 40% of the basic tax assessed
have become final and executory
B. Tax cases subject of final and executory 50% of the basic tax assessed
judgment by the courts
C. Pending criminal cases filed with the 60% of the basic tax assessed
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
D. Withholding agents who withheld taxes but 100% of the basic tax assessed
failed to remit the same to the Bureau
The tax amnesty rate of 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.
In cases where the delinquent taxes have been the subject of application for compromise settlement
pursuant to Section 204 of the Tax Code, whether denied or pending, the amount of payment shall be
based on the net basic tax as certified by the concerned office following the procedure under Section
5(C) of these Regulations.
Illustration 1. With denied/pending Application for Compromise Settlement:
Basic Tax per FAN P1,000,000
Basic Tax Paid per Compromise Settlement Application 400,000
Net Basic Tax Prior to the Effectivity of these Regulations P600,000
Multiply by the Tax Amnesty Rate 40%
Amount of Tax Amnesty to be Paid P240,000
For all other cases with partial/installment payments, the amount of payment shall be based on the
net amount as certified by the concerned office as specified under Section 5(C) of these Regulations.
Illustration 2. With partial/installment payments:
Basic Tax per FAN P1,000,000
Partial Payments Made Prior to the Effectivity of these
Regulations (Net of Payment Applied to Penalties) 200,000
Net Basic Tax P800,000
Multiply by the Tax Amnesty Rate 40%
Amount of Tax Amnesty to be Paid P320,000
In case the delinquent account/assessment consists only of unpaid penalties due to either late filing
or payment, and there is no basic tax assessed, the taxpayer may avail of the tax amnesty in
accordance with the procedure set forth in Section 5 of these Regulations, without any payment due.
