RR No. 12-2002: Provides the policies, procedures and guidelines in the implementation of the Voluntary Assessment and Abatement Program (VAAP) for taxpayers with underdeclared sales/receipts/income for the calendar and fiscal years 2000, and 2001, and the first and second quarter ending June 30, 2002, pursuant to the RELIEF Program of the Bureau of Internal Revenue, and the consequences for non-availment thereof

Summary

RR No. 12-2002, issued September 12, 2002, provides the policies, procedures and guidelines for the Voluntary Assessment and Abatement Program (VAAP), and the consequences of not availing of it.

Key points

1. Who and what periods. VAAP is available to taxpayers subject to Income Tax, Value-Added Tax and Excise Tax who underdeclared sales, receipts, income or taxable base for Calendar and Fiscal Years 2000 and 2001, and the first and second quarters of 2002. Underdeclarations in the third quarter 2002 returns and succeeding quarters are not entitled to VAAP and face the full force of the law.
2. Letter Notice. Using data from the BIR Reconciliation for Listing and Enforcement (RELIEF) System, the Bureau sends a Letter Notice to persons found to have under-reported sales or receipts. The Letter states, among others, the amounts payable and the deadlines for the VAAP Application Form and payment.
3. No Letter Notice. A taxpayer who wants to avail of VAAP but received no Letter Notice submits the VAAP Application Form (VAAP-AF) and pays using the VAAP Payment Form (VAAP-PF) on or before November 15, 2002.
4. Non-availment. If a taxpayer fails or refuses to avail within the Letter Notice period or the general deadline of Nov. 15, 2002, the BIR institutes the criminal or administrative actions authorized under the Code. These are closure, criminal actions, or audit and investigation, depending on the extent of under-declaration.
5. Additional discrepancies. Even after VAAP payment, if the BIR finds additional sales or overstated purchases or cost exceeding the amount voluntarily disclosed by 10% or P 1,000,000.00, whichever is lower, the VAAP availment is null and void and the entire under-declaration faces the full force of the law. If the discrepancy is equal to or less than those thresholds, the availment stays valid, provided the appropriate additional tax on it is paid.

Who is affected

• Taxpayers subject to Income Tax, Value-Added Tax and Excise Tax with underdeclared sales, receipts, income or taxable base for 2000, 2001 and the first and second quarters of 2002

Deadlines and effectivity

• VAAP covers Calendar and Fiscal Years 2000 and 2001, and the first and second quarters of 2002
• Application and payment without a Letter Notice: on or before November 15, 2002

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.