RR No. 21-2020: Prescribes the policies, procedures and guidelines in the implementation of the Voluntary Assessment and Payment Program for Taxable Year 2018 under certain conditions

Summary

RR No. 21-2020 sets the policies and procedures for the Voluntary Assessment and Payment Program (VAPP) for Taxable Year 2018 under certain conditions.

Key points

1. Coverage. The VAPP covers all internal revenue taxes for the taxable year ending December 31, 2018, and fiscal year 2018 ending July 2018 to June 2019. This includes One-Time Transactions (ONETT) taxes such as Estate Tax, Donor’s Tax, Capital Gains Tax, related Creditable and Expanded Withholding Tax, and Documentary Stamp Tax. Any person, including estates and trusts, who erroneously paid or failed to file or pay may avail, except four groups.
2. Excluded taxpayers. These are those with a Final Assessment Notice that became final and executory on or before effectivity, and those under investigation on a tax informer’s verified information under Section 282 of the NIRC. Those with tax fraud cases pending in the DOJ or courts, and those with pending tax evasion and other criminal cases under Chapter II of Title X of the NIRC, are also excluded.
3. Period, requirements and payment. Qualified persons may avail until December 31, 2020, unless the Secretary of Finance extends it. Requirements include BIR Form No. 2119 (2 copies), Payment Form BIR Form No. 0622 with proof of payment (3 copies), and filed returns and financial statements or remittance returns, depending on the type of availment. ONETT availments need the ONETT returns. Payment must be in cash, so a Tax Debit Memo does not qualify.
4. Processing. Applications are filed with the LT Office or RDO having jurisdiction, and ONETT sales of property with the RDO covering the property’s location. Separate applications are needed for non-ONETT and ONETT availments in different RDOs. Officials process them within thirty (30) working days, defects must be fixed within ten (10) working days or the application is denied, and the Certificate of Availment is issued within three (3) working days from approval.
5. Amount to pay. For income tax, VAT, percentage tax, excise tax and non-ONETT documentary stamp tax, the amount is the higher of a percentage of 2018 gross sales or of 2018 taxable net income, but not below a minimum. Net increase in total taxes from 2017 to 2018 of not more than 10% is 3% or 7%, more than 10% up to 30% is 2% or 6%, and more than 30% is 1% or 5%. Net decrease of not more than 10% is 4% or 8%, and more than 10% is 5% or 9%. Minimums are P75,000 for individuals, estates, trusts and other juridical entities, and ₱ 1,000,000, ₱ 500,000, ₱ 250,000 or ₱ 100,000 for corporations by subscribed capital. Withholding taxes pay 5% of the total basic withholding tax remittance for 2018, and ONETT taxes pay the basic tax due plus 5%.
6. Effects of availment. A taxpayer with a Certificate of Availment is not audited for 2018 for the covered tax types, and pending audit documents are withdrawn. Availment becomes subject to audit with the Commissioner’s approval if there is strong evidence of under-declaration or overstated deductions of more than 30%, or verifiable information of unremitted withholding taxes. Payment is a waiver of refund or credit claims and is not an admission of fraud.

Who is affected

• Persons, natural or juridical, including estates and trusts, liable for internal revenue taxes for taxable year 2018

Deadlines and effectivity

• Availment until December 31, 2020, unless extended by the Secretary of Finance
• Processing within thirty (30) working days from receipt
• Defects fixed within ten (10) working days from notice
• Certificate of Availment within three (3) working days from approval

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