RR No. 6-2024: Implements Section 45 of RA No. 11976 (Ease of Paying Taxes Act), on the imposition of reduced interest and penalty rates for micro and small taxpayers

Key points

1. 10% penalty. A penalty of ten percent (10%) of the amount due applies on failure to file a return and pay on time, failure to pay a deficiency tax within the period in the notice of assessment, or failure to pay the tax due on or before the due date. No penalty applies to an amended return if the initial return was filed and paid on or before the due date. For a deficiency assessment from audit, the penalty applies if the audited return was filed late.
2. 50% penalty for willful neglect or fraud. Willful neglect to file or a false or fraudulent return carries a penalty of fifty percent (50%) of the tax or deficiency. Substantial under-declaration of sales or income, or substantial overstatement of deductions, as determined under rules of the Secretary of Finance, is prima facie evidence of a false or fraudulent return. Each means exceeding thirty percent (30%) of the declared amount or of actual deductions.
3. Reduced interest. Interest on unpaid tax is fifty percent (50%) of the rate under Section 249, with legal interest for covered taxpayers set at six percent (6%). The Commissioner issues a separate Circular if a new legal rate is prescribed.
4. Information return penalty. Failure to file an information return or keep records carries a penalty of Five Hundred Pesos (₱500.00) per failure. The yearly total may not exceed Twelve Thousand Five Hundred Pesos (₱12,500.00).
5. Compromise penalty. For violations of Sections 113, 237 and 238 not involving fraud, the compromise rate is fifty percent (50%) of the applicable rate or amount under Annex A of RMO No. 7-2015 and its amendments. The compromise amount cannot differ from the prescribed amount except when approved by the Commissioner or his authorized representatives, who may accept a higher amount.

Who is affected

• Micro and small taxpayers (covered taxpayers)

Deadlines and effectivity

• Applies prospectively in accordance with Section 51 of RA No. 11976