RR No. 21-2020 — Pre cribe the policie , procedure and guideline in the implementation of the Voluntary A e ment and Payment Program for Taxable Year 2018 under certain condition (Publi hed in Philippine Star on September 5, 2020) Dige t | Full Text | Annex A | Annex B | Annex C

BUREAU OF INTERNAL REVENUE RFPUBLK OF FHE PHHIJPPINF'S DEPARTMENTO HINANG Quezon (ity

AUG 1.8. 2020

REVENUE REGULATIONS NO.2| .2020 SUBJECT : Voluntary Assessment and Payment Program for Taxable Year 2018 t nder Certain Conditions

TO All Internal Revenue Officials. Employees. and Others Concerned

procedures. ar:d guidelines in the implementation of Voluntary Assessment and Pay ment Program (VAPP) tor the collection of additional tax revenues. which could otherw ise be collected through audit and enforcement effort.t and other pertinent prov isions of the National Internal Revenue Code (NIRC) of 1997) as amended. these Regulations are hereby promulgated to provide for the policies. SECT10N 1. Purpose. .-- Pursuant to Section 244. in retation to Sections 6 and 204

fulfill the Govrnment's funding requirements during these unprecedented times. and to respone: to the needs of critically impacted industries heavily atfected by the pandemie. In order to sustain these programs. extraordinary measures are necessary to Coronavirus disease 2019 (COVID-19). which has caused global health emergency and resulted in severe economic and social ramifications. It has ted the Government to implement var:ous programs to help alleviate the suffering of our fellow countrymen SECTION 2. Policy. - It is recognized that the country is currentty battting against the

the number o:' audit investigations by encouraging an increase in voluntary tax compliance. and social distincing measures while. at the same time. maximizing revenue collection with the least administrative costs. the Bureau of Internal Revenue (BIR) is reducing Moreover. to l:mit taxpayer contact considering existing COVID-19 related protocols

pay ment of additional tax under the VAPP for the covered period. w ith or without an audit investigavion. and be entitled to the privilege under these Regulations.t inereased espenditures of the Government during this pandemic through voluntary Therefore. the taxpay ing public is hereby granted the opportunity to help defray the

SECTION 3. Coverage. - These Regulations shall apply to all internal revenue taxes transactions (ONF.TT) such as estate tax. donor's tax. capital gains tax (CGT). as well covering the taxable year ending December 31. 2018. and fiscal year 2018 ending on the last day ot the months of July 2018 to June 2019. including taxes on one-time

BUREAU QF INTERNAL REVENUE NnTYY

tUGI SEP. Q4 2020 r5s am f RECORDS MGT. DIVISION

documentary stamp tax (DsI). as ONET[-related creditahle sithholding tax (CWIespanded withholding tax and

erroneousty paid his its internal revenue tax liabilities or failed to file tax returns pay taxes. may av.vil of the benefits under these Regulations. except those fatling under any of the following instances: revenue taxes for the above specified period's who. due to inadvertence or otherw ise. Any person. tatural or juridical. including estates and trusts. liable to pay internal

a. Those taxpavers who have alreadv bcen issued a Final Assessment Notict

(FAN : that have become final and executory. on or hefore the effectiv ity ot these Regulations:

h. Persons under investigation as a result of verified information filed by a Tax Informer under Section 282 of the NIRC of 1997. as amended. with respect t the de:iciency taxes that may be due out of such verified information:

Those with cases involving tax fraud tiled and pending in the Department of Justice or in the courts: and

d. Those with pending cases involving tax evasion and other criminal offenses

under &hapter H of T'itle X of the MIRC of 1997. as amended.

SECTION 4. Period of .4vailment. -- Qualified persons can avail of the benefits of the VAPP untit December 31. 2020. unless extended hy the Secretary of Finance.

applicatious. The taxpayer-applicant shall signify his its intention to avail the benefits under these Regulations by apply ing through submission of the following requirements: SFCTION 5. Conditions for the uvailment requirements and processing of

Mandatory Requirements:

a. Duly .iccomplished Application Form {BIR Form No. 2119 (Annex A)} {original for the Large Taxpayers (LT) Office/Revenue District Office (RDO) and duplicate for the taxpayer): and

b.Payment Form (BIR Form No. 0622 (Annex B)) with proof of payment (original for the L.T Office/RDO. duplicate for the taxpayer. and triplicate for the collecting agent).

Additional Requirements:

c. Filed tax returns. proof of payment of taxes paid in 2017 and 2018 and audited Financ al Statements for the covered taxable year for those availing of the

progran under Seetjon 9.a:

BUREAUOF TNTERNAL REVENUE NNTYYN SEP 04 202 aN

U RECORDS MGT -. Ohvi

d. Copy of remittance returns and proof of payment of final and ereditable w ithholding taxes for taxpayers availing of the program under Section 9.b:

Copy of duly paid BIR Form 0605 stamped either by the Authorized Agent Banks (AABs) or Revenue Collection Ofticers (RCOs) duly signed by the t.1 Of fice RIO) where the taxpayer is registered and proof of payment representing any. cowering the taxable period under Section 3: seulenent of previous deticieney tax. with or without an assessment notice. if

f.Duly iccomplished ONLT1 tax return(s) (BIR Form Nos. 1800. 1801. 1706. transaction of taxpayers availing of the program under Section 9.c. 1707. 2000 : OT. 0619-Fy and corresponding documentary requirements for the

the donor is tomiciled at the time of donation: or where the property is located. I ikewise. separate applications must be filed for availment under Section 9.c tor transactions involving the sale of real properties under the jurisdiction of different be in cash as & condition to avail of the privilege under these Regulations. Hence. non- ONL IT invoiving the sale of property which must be tiled paid with AABs RCOs under the RD) covering the location of the property. Hence. separate applications must be tiled in case the availment is under non-ONE: IT (Sections 9.a and 9.b) and ONE: I1 wherein the s.ime taxpayer is registered in an RDO different from the RDO having jurisdietion over the place where the decedent is domiciled at the time of death: or where cash modes of payment. such as Tax Debit Memo and the like. will not qualify as a valid paymen:. The duly accomplished BIR Form No. 0622 shall be presented for pay ment to any BIR Authorized Agent Bank (AAB) or Revenue Collection Officer (R(O) under the 1.[ Otfice RDO having jurisdiction over the taxpayer. except tor R() The voluntary pay ment. as indicated in the BIR Form No. 0622 (Pay ment Form). should

to the Chief. I. I Office Revenue District Officer. as the case may he. for approval. who Shall afti\ his signature on the BIR Form No 2l19. (30) working days from receipt. the Revenue Officer will evaluate the Application. Payment Form and other documents submitted. and will endorse the same to the Assistant Chief. LT Office Assistant Revenue Distriet Ofticer (ARDO)) for review. and Serv ice with the I I Office RDO having jurisdiction over the taxpayer. Within thirty The requirements from items a to t above can be filed personally or through courier

the notification email. approving ofticial shall notify the concerned taxpayer through the email address provided in BiR Form No. 2119 and shall require the taxpayer to rectify the defects and or comply with pay the deficiencies within ten (1o) working days from receipt ot On the other hand. if the review reveals deficiencies or defects in the av ailment. the

tailure to act nd or pay the required amount on the part of the taxpayer within such period shall re sult in the denial ot' the application.

BUREAU OF INTERNAL RFVE M

NnNiYm

SEP. 04. 220 i7.55am a Sc 201

to the privilege granted under these Regutations. SFCTION 6. Issuance of the Certificate of Availment. - A Certificate of Availment (Annex () shall be issued by the concerned 1.T Office RD) within threc (3) working days from approval of the application. Such Certificate shall serve as proof of the taxpayer's avatilment of the VAPP. compliance with the requirements. and entitlement

concerncd reviewing office not later than the sth day following the month of issuanee of the Certific ate of Availment for post review. The LT Office RDO shall transmit all dockets on approved VAPP applications to the

taxable year 2018. in case of auditinvestigation. and/or the suhmission of erroneous/incomplete/falsified information.t submission or submission of erroneous incomplete falsificd information concerning the V APP shall not entitle the taxpayer to avail of the privilege under these Regulations Still. the voluntary payment may be applied against any deficieney tax liability for the SFCTION 7. Consequence of non-suhmission of the documentury requirements Non.

to the privilege under these Regulations. payments made against any deficiency tax liability for the taxable year 2018. in case of audit investigation. SFCTION 8. Treatment of Invalid Availment/Deficient or Defective Availment. Taxpay ers whose availment is found to be invalid. deficient or defective are not entitted However. they may apply the voluntary

aceordance with the follow ing schedule: SECTION 9. Amounts to he paid for availment. - The amount of taxes to be paid as a condition to avail the privilege under thesc Regulations shall be determined in

a For Income Tax (IT). Value-Added Tax (VAT). Percentage Tax (PT). Fxcise Tax

(:I . and DST other than DST on ONETT

Net inerease of not more than t0.. Increase/Decrease in the Total Taxes Due from 2017 to 2018 {(A) income Whichever is the higher of. 30% of 2018 gross sales 78/% of 2018 taxable net Amount of Voluntary Tax Payment (B Individuais. estates and trusts ~ P75.000 Corporations Minimum Amount

than 10., up to 30% Vet incre ase of more 6% of 2018 taxable net income 2/% of 2018 gross sales With subscribed than P50 million PL.000.000 capital of more

Net increase of more than 300 5%o of 2018 taxable net income 1%o of 2018 gross sales b.With subscribed than P20 million capital of more

BUREAU OF INTERNALREVENUE InN SEP.04 2020 i:s5am ON

RECORDS MGT. DIVISION 0uJ

Net decrease of more Net dectease of not than t0%. more than too Increase/Decrease in] the Total Taxes Due from 2017 to 2018 (A) 9% o of 2018 taxahle net 8*o of 2018 taxable net income 5%o ot 2018 gross sales income 49o of 20t8 gross sales Whichever is the higher of Amount of Voluntary Tax Payment B Or d. With subseribed . Minimum Amount to P20 million With subscribed P250.000 than P5 miltion up up to P 50 million capital ot more P500.000 C)

capital ot Ps million and less P100.000

Other juridical entities. including but not limited to cooperatives foundations. general professional

P75.000 partnerships

be less than the amount in column (. Total taxes due in 2017 and 2018. for purposes quarterly payment or advance payment. Gross sales and taxable net income shalt be based cn the Annuat Income T'ax Return for the taxable year ending December 31. 2018. :nd fiscal year 2018. ending on the last day of July 2018 to June 2019. ot the abos e schedule refer to the sum of all tax due per tax return (I1. PT. I. I. and DS I) and net VA I pay able (VA I) before dedueting any creditable withholding tax. I he amount to be paid must he the higher amount in cotumn B. but in no case should

Hlustration l:Corporanom A. a YAT-regstered entuy engaged in the mameueture ot ergaretes. wuth a suhseribed capital ot P15.000.000. had the tollow mg tuxes due per tax returns tiled pertainng to the tiseal vear endongt Apri R0. 20A, dndAprt 30. 2019

Is ome Tax Iax Tvpe April 30. 201x F} onding 3(00 Apri 30. 2a19 FY endng 405.(HM) I ahne-Added Tux 200.000 230.000 Fxeise Ta 30).000 3S0 (H I nal Taxes Due S(O0 XS.0H

BureatgE inteRnat r

G

SEP.04_2020 C I1.55&m Uu RECORDS MGT. DIVISION

the h.netits ot the I'APP it hus to puy the amount ot P 660.000. computed as Its gr ns sales dnd toxah!e net meome tor FY ending April 30. 2019. amouoted to P 12.000.o00 and P1.350.000.respectively: It Corporation A will aval of tollov's

I. (ompute tor the pereentage inerease in the total taxes due trom FY ending April 30. 2018 to FY ending April 30. 2019tX-5.000-X00.000) &00.(000 03-5

2 Suce the merease is not more tham I0"a. deternme the higher hetween 3d ut gross sales dnd -a. ot tuoable net ineome

3"601 P22.000.000 h -of 11.350.000- 94.500 6hn00

Higher amont is P 660.000 3 The mmmum amoumt tor a corporation wuh a subscrtbed capital ot more thom P5 Million but not more tham P 20 Aillion * P 250.000 4. ('e mpare the amount per item 2 e agutnst the minimum amount reipuired. S The anmount to he pad to ana ot the Yarp for the taves ahove is P 560.000

the cases excluded from the coverage of the VAPP under Section 3. In cases where any non-ONE I"I tax deficiency covering the taxable period under Section 3 has already been paid. the basic deficiency tax paid shall be added to the tax due of the applicable tax returns for 2018 in computing the amount of voluntary payment required under Section 9.a. provided. that. such payment did not arise from

coverng thre two taxahle qurters ending.Julv 31.2018.andOctober 31.201s Issued a Fimal Assessnent Nottce tFANi covermg sand el.A with the tollowmg that Corporation A was issued an electronie Letter ot Authority tel.Al tor Y Al In .luiv 2020. hetore the ettecttvity ot these Regulations. ( Hustration 2: In additon to the tacts provided under Ilustration l. assume amomns puyahle poratimAas

(Compromise Penaln Bisic YaT dne Surcharge Interest Total Taxes Due Detuils Amount Due 5.000 300.00 515) 25.() S.000

additiomal puyment ot taxes pertamng to the tiscal vear ending April 30. 2010. as toliov's tsee Illustrutiom I tor facts) If corporation A sentled satd FAN. its settlement can he considered us an

n.ome Tax Iaue -Added Tax Fcise Ta Te tul Taxe's Due Tux Tv'pe April 30. 201& FY ending 30 X0}( 300000 2000 April 30. 2019 FY onding I.I'5.000 *520.000 40$.000 250000

BUEEAIAFINTERNALRFVENUE

NNTYN

W SEP. 04 2020 "5S am

C JW RECORDS MGT. DIVISION

than I0". Net decrease of more Aet decrease of not more than To"o Increase/Decrease in the Total Taxes Due from 2017 to 2018] (A) 8%o of 2018 taxable net 59o ot 2018 gross sales 9*o of 2018 taxable net incomc income Whichever is the higher of 47o of 2018 gross sales Amount of Voluntary Tax Payment B Y C d Minimum Amount With subseribed to P20 million than P5 million up With subseribed up to P 50 million capital of more P250.000 P500.000 (()

P100.000 capital of Ps million and less

entities. including but Other juridical not limited ts

P75.000 professional toundations. general cooperatives. partnerships

31. 2018. :nd fiseal year 2018. ending on the last day of July 2018 to June 2019. of the above schedule refer to the sum of all tax due per tax return (Ir. PT. F.I. and DS I) and net V A I pay able (VA I ) before deducting any creditable withholding tax. quarterly payment or advance payment. Gross sales and taxable net income shall be based on the Annual Income Tax Return for the taxable year ending December be less than the amount in column C. Total taxes due in 2017 and 2018. for purposes I he amount to be paid must be the higher amount in column B. but in no case should

Hlustration I:Corporatom A. d YAT-regustered entty engaged m the mumucture ot ergarefes. wuh a suhseribed capilul ot P15.000.000. had thet tollen mg tuxe's due per tux renrns tiled pertainmg to the tiscal vear enimst April 30. 2us. and April 30. 2019

Tcome Tax Tax Tvpe April 30. 201s FY ending 300.000 Aprul 30. 2019 F}endmg 405.00 Yalue-Added Tax 200.000 220.000 Fxeise Tan 3).00 350(1) IHalTaesD S0)) S

BUREA GF INTERNAT RY

N

C SEP: 04 2020 .5 5am{

UJU RECORDS MGT.DIVISION

Weue t FAN * Cmsputedas P220.900YAT paid per return - P300.000 hasic tA1dus per

It('orporatton A will avalof the henefits ot the I'APP. it has to par the umouont ot P.50.000.computed sis tollows

I.(ompute tor the pereentuge imerease m the totul tuxes due trom FYendmg April 30.201Sto FY endmg April 30. 2019t1.1-5.000-800.000 300.000 16 x~5

Spe'e the mereuse is more than 30a. determme the higher hetween I'n o! 2r xs vale's dnd 5Pa ot taxahle net tmeome

h 51 P 1.350.0006~.500 10t P2.000.000 230.00

Hrgher amount is P 220.000

3 Th.e mmimum smouot. tor d corporatiom with d suhserthed capitul ot moret thom P5 Million but not more than P 20 Nillion : P 250.(000

4. Ct mpare the amoon per item 2 c agamst the minmum amount reeurard 5. The umount to he paid to avail of the t'APP tor the taxe's ahove is P50.00000

h. For Final Withholding Taxes (on (ompensation. Fringe Benefits. ete.) and (reditable Withholding Taxes (CW T) other than (WT on ONE I'I. the amount to be paid shall be five pereent (5%o) of the total basic withholding tax remittance for the taxable year 2018.

tor the catendar year 2018 in the anoumts ot P 45.000 and P 200.00). the arount ot P 12.250, computed as tollows Hllustration 3: ('ompany B hus remitted tinul and creditahle withheld tuxest respestively: It Company B will avait ot the henefits ot the +APP. it snall piy

(Creatabie wtthheld taxes remtted F'mat wuthhetd taxes remittedl Tot' anouont remtted Totu volotary tux pavment requred Multph by P345.000 P2.250 4S.HH) 200

the specific tas. type for which they are pursuing the claim for tax credit refund. For purposes of VAPP availment under Sections 9.a and 9.b. taxpayers must apply for Section 10. tor taxpayers w ith claims for tax creditrefund. this shall constitute a waiver of suet elaims under Section 12 hereof. unless they exelude in their availment all registered caxes indicated therein in order to avail of the privilege set forth under

N

BUREAUOF INTERNALREVENUE RECORDS MGT.CIVISN nntYmt CU SEP. 04 202 N am fM)

For taxes on ONI:IT. such as Estate Tax. Donor's Tax. CGT. ONFIt-related ('w'l Fxpanded Withholding Tax. and DST. the amount to he paid shall he the basic tax due of the untiled tax return/unpaid tax due plus 5%.

Decleration m the amount ot xo0.o00. The (GT and corresponding DST were hot pad m 2018 It Mrs. (Crue will vail ot the I APP. she will pav the amouont o1 P x2.6s- S),comput'd (s fo{o time ot sale ot P 3.000 per square meter amd Far Morket talue per Tax Hlustration No. 4: Mrs. Crue sold her lot located at Cavite in August 2o!x The corea sold contams 350) square meters wuth applicable conal value at the

(GT Add: 524P 63.000(00 x S%a) P3.000 x 350 square meters Fota P1.050.000X 69a p 66.15000 P63.000 3.150(0

DST P1.0$0.000 P1000X P15 Aid S ip I5"5YSo T' tul PI5.-S000 p16.53~50 TS

T't tal volotary tux payment re'qured P 83.6SF.50

SECTION 10. Privilege. -

No Audit - A taxpaver with a duly issued Certificate of Availment shall not be audited for 20+8 for the tax types covered by the availment.

invalid. If the taxpayer's availment has been determined to be valid. a Certificate of In case the taspayer's tax returns for the covered taxable period are currently being audited. the conduct of the audit shall be suspended upon the availment of the VAPp the Availment shall be issued and consequently. the issued Letter of Authority. Iax Verification Notice. Discrepancy Notice. Notice for Informal Conference. Preliminary Assessment Notice. Final Assessment Notice for pending cases shall be withdrawn and canceled w hile the avaiiment is under evaluation. It shall resume if the availment has been found

approval of the Commissioner of Internal Revenue. in the following instances: However. despite the issuance of a Certificate of Availment. the taxpayer's availment Shall be rendered invalid and shall be subiect to audit or investigation follow ing the prescribed procedures under existing rules and regulations. upon prior authorivation and

a When there is strong evidence or findings of under-declaration of sales. receipts

or income or overstatement of deductions hy more than 30% based on a written report of the appropriate revenue official stating the facts with supporting docum:nts: and or

BUREAIJOF UATCE 8 NNi U

RECORDS MGT. DIVISION gu SEP. 04 2020 i:55 om

h. When there is verifiable information that the taxpay er has w ithheld but failed to remit withholding taxes.

be assessed against the taxpayer after the audit/investigation.t Any voluntary payiment may be applied against the deficieney tax due. if any. that may

apply for VAPP. prov ided that the unfiled tax returns shall first be filed and-or unpaid taxes plus cor:esponding penalties for late tiling and payment shall tirst he paid by the taspay er. returns and or pay their taxes for the taxable year 2018 under Section 9.a hereof can SECTION 11. Failure to file and pay tax returns. - Taxpayers who failed to file tax

credit. notw ithstanding the collection thereot' from an erroneous payment.t SECTION 12. Non-uvailubility of cash refund or credit. Any pay ment made under these Regulati ons is construed as a waiver of the taxpayer's right to claim for refund or

SECTION 13. Non-udmission of fraud or erroneous payment. - The act of voluntary (o pay the tax crroncously. payment under this program shall not be deemed as an admission on the part ot the taxpayer that there was fraud in the declaration of its taxes and/or there w as an intention

SFCTION 14. Effectivity. - These Regulations shall take effect after fificen (+5) day - immediately follow ing its publication in any new spaper of general circulation.t

ARLOS G. DOMIN Secretary of Finance

Recommending Approval: SEY E S 230

1a auAx

Commissionet of Internal Revenue CAESAR R. DULAY

036593

BUREAUOF INTERNALRFVENUE NNNYYN

CC SEP 0.4 2020 11.5 sam 2 RECORDS MGT.DIVISION