RMC No. 111-2020 — Clarifies certain issues relative to the Voluntary Assessment and Payment Program (VAPP) pursuant to Revenue Regulations No. 21-2020 Digest | Full Text

'" -' I -, I REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERI{AL RE\M,NUE Quezon City SUBJECT Octobet 7,2AAA TO RE\rENUE MEMORANDUM CTRCULAR NC|. llL&0dA Clarifications on Certain Issues Relative to the Voluntary Assessment and Payment Program (VAPP) Pursuant to Revenue Regulations (RR) No. 2l-2A20 All Internal Revenue Officers, Employees and Others Concerned This Circular is issued to provide clarifications on the implementation of the Voluntary Assessment and Payment Program (VAPP) under Revenue Regulations (RR) No. 21-2O2O,to wit: Qt. Who are qualified to avail of the VAPP? ' Al In general, all persons, natural and juridical, including estates and trusts, are qualified to avail of the VApp. Q2. What is the covered period? 1^2. The VAPP covers calendar year 2018 and fiscal year 2018 ending in July, August, September, October, and November 2018, as well as those ending in January, February, March, April, May and June 2019, for availrnents on the registered tax types ofthe taxpayer. For one-time transactions (ONETT) of individuals and taxpayers on a calendar year basis, the VAPP covers all transactions from January to December 2018. For ta,Ypayers on a fiscal year basis, the covered ONETT are those within their fiscal year 2018. For example, if the fiscal year of the taxpayer is from May li20l8 to April 30,2019, the ONETT covered is within this inclusive period. Q3. Can a taxpayer avail of the pro$am for only one or two tax types and leave out the other tax types to which the taxpayer is registered? ,{3. Availment should cover all the tax types to which the ta,xpayer is registered, including withholding taxes, except when the taxpayer is pursuing a claim for tax crediVrefirnd, in which case, he can leave out the ta,x type for such claim. Q4. Can a taxpayer avail of the program for the tax type(s) only on ONETT? 44. Yes. Q5. What forms shall be used in the application and payment of VApp? A5. Taxpayers shall use BIR Form No. 2l I 9 for the application and BIR Form No. 0622 for payment of the corresponding voluntary tax.

Q6. How will the BIR Form No. 2ll9 be accomplished and filed and where will the payment per BIR Form No. 0622 be paid? A6. Taxpayers, including those registered in the electronic Filing and Payme{!Vs1-e4 (erpsj have to llownload the?DF-version of the BIR Form Nos. 2ll9 aurtd 06i2 from the BIR website (wr'vu'.trir'sov.ph) under the BIR Forms section, completely fill-out the applicable fields and pay the corresponding taxes due thereon to the Authorized Agent Bank (AAB/Revenue Collection office (RCo) where the taxpayer is registered or havingjurisdiction over the transaction, as the case may be. Payment through e-payment channels (e.g., G-Cash and PayMaya) is not allowable. If a business taxpayer wants to avail of the benefit of the program, his availment should cover both Sections 9.a. and 9.b. Separate application and payment forms should be accomplished for these sections. Likewise, ii'availment will also cover Section 9.c, a separate application and payment form should be prepared. The above forms, together with other required documents, may be filed in person or through courier service, to the concerned BIR office. Q7. Since multiple tax types are covered in the applications, what Alphanumeric Tax Code (ATC), Ta,x Type Code and Ta,x Type Description will be indicated on the application (BIR Form No. 2119) and payment (BIR Form No. 0622) forms? A7. For availment under Section 9.a for Income Tax, Value-Added Tax, PercentageTax, Excise Tax and Documentary Stamp Tax (DST) other than for One-Time Transactions (ONETT), the ATC is MC341. For availment under Section 9.b for Final and Creditable Withholding Taxes, the ATC is MC342, and for availment for taxes on ONETT (Estate Taq Donor's Tax, Capital Gains Tax, Creditable/Expanded V/ithholding Tax and DST), the ATC is MC343. QS. Where will the application for VAPP on ONETT for sale r:f shares of stock not traded through the local stock exchange be filed and what additional requirements must be submitted? A8. The application shall be filed with the BIR Office where the taxpayer-seller is registered. The additional requirements that must be submitted ard copies of the duly validated BIR Form No. 1707 - Capital Gains Tax Retum (For Onerous Transfer of Shares ofStocks Not Traded Through the Local Stock Exchange) and BIR Form No. - 2000-0T (Documentary Stamp Tax Declaration/Return One-Time Transactions), Payment Forms and proofs of tax payments. Q9. What copy ofthe tax return will be submitted as additional requirement for availment for creditable/expanded withholding tax for onerous transfer ofreal property other than capital asset? A9. BIR Form No. 1606 - Withholding Tax Remittance Return Q10. If there are tax returns data which are different from those in the BIR's information system, what will prevail, the taxpayer's copy or the BIFi's record? Al0. The BlR-Integrated Tax System (ITS)-generated data will prevail unless there is proofoferror in encoding ofthe tax returns data. fraf\i."Yirilyl r]1:",:)t1'f;';ii'Ili:'l.i

Q 1 1. If a taxpayer is registered in one district who wants to avail of the VAPP for all his registered internal revenue taxes and he also wants to avail for his donor's tax on his donation and capital gains tax on a sale ofhis real property, where should he file the VAPP applications? A11. For availment of the registered internal revenue tores under Sections 9.a and 9.b of RR No. 2l-2020, the filing of the application should be in the BIR office where the taxpayer is registered. For availment of donor's tax, the application should be filed at the RDO where the donor-taxpayer is domiciled at the time of donation and for the transaction involving sale of real property, the application should be filed with the RDO having jurisdiction over the location of the property. QI2. Is payment by check acceptable? A12. Yes, provided that check payments conform to the payment requirements ofthe BIR. Q13. Can payment through Tax Remittance Advice (TRA) be considered as "cash" under the regulations? A13. No. The purpose of the regulations is to raise additional revenues to augment government funds due to rising expenditures from the outset of the COVID-l9 pandemic. Hence, cash or all its forms are required for payment. Ql4. What do we mean by gross sales as basis for computing the amount of voluntary tax payment under Section 9.a? Al4.,For purposes of thEse regulations, "gross sales" shall mean the sales/receipts/revenues/fees net of sales retums, allowances and discounts per Annual Income Tax Return. Q15. If there is no increase or decrease in the total taxes due for all tax types in 2018 compared to all taxes due in 2017, as in the case of enterprises enjoying tax exemptions and incentives, how will the voluntary tax payment under Section 9.a be computed? Al5. The voluntary tax payment shall be computed based on the "net increase of not more than lUYo" per table under Section 9.a. Q 16. If the tileayer is only in its first year of operation for 201 8 and there are taxes due for this year per tax returns filed, can the ta:<payer avail of the VAPP? If so, how will the voluntary payment under Section 9.a be computed? A16. Yes. Under this scenario, the voluntary tax payment shall be computed based on the "net increase of more than30Yo", since there is no tax payment to be considered for 20t7. Q17. If the taxpayer paid improperly accumulated earnings tax, will the payment be included in the total taxes due for the purpose ofcomputing the increase/decrease? A17. Yes, improperly accumulated earnings tax paid should be included in the total taxes due as it can be considered as income tax. Q18. If the taxpayer's assessment on ONETT pertains the voluntary payment be computed?

A18. The voluntary payment shall be 5oh of the basic tax paid. Q19. In case the taxpayer paid minimum corporate income tax (MCIT) in 2017 and paid the normal income tax in 2018, what shall be the basis for his/its income tax due per retUrn for 2017 -and 2Al8? A19. The MCIT shall be the income tax due for 2017 while the annual corporate income tax due computed under the normal income to< before deducting any tax credits/payments shall be considered ai the income tax due for 2018. Q20. Do we consider excess tax credits from prior period/taxable year in determining the Net VAT due? If the net VAT due is a negative amount, what will be the effect in computing the increase/decrease of total to<es due ftom20l7 to 2018? A20. Yes, the reference to determine the VAT due for taxable years 2017 afi 201 8 is Line 25 - 'Net VAT payable" in the quarterly VAT return. If the net VAT due is a negative amount, then the total taxes due for the year will not be reduced by the negative VAT amount. Q21. If the taxpayer paid percentage tax or availed of the eight percent (8%) income tax rate despite having exceeded the threshold of three million pesos (P3,000,000), can he apply for the VAPP? A2l. Yes, provided that the VAT return will be filed and the VAT will be paid with the corresponding penalties after deducting the total percentilge tax payments. Q22. If the basic deficiency tax for 201 8 is added to all the tax due per returns to determine the increase/decrease from2017 to 2018, will any deficiency tax payment for 2017 be added also to all the tax due of the retums in20l7? A22. No. The RR expressly stated that basic deficiency payment shall only be added to the taxable period covered under Section 3 for purposes of computing the increase/decrease in tax payments, which is taxable year 2018, that includes fiscal year ending July 2018 to June 2019. Q23. Is the waiver for refund in Section 12 of the regulations applicable only to claims for refund on erroneous payment? A23. Yes. In Section 9.a of the same RR, it is stated that for taxpayers with claims for tax credit/refund, this shall constitute as a waiver of such claims under Section 12 unless they exclude from their availment the specific tax type for which they are pursuing the claim for tax credit/refund. Q24. If the taxpayer would like to apply for the VAPP but he declines to waive his right to claim for refund, can he leave out from the availment the tax type for said refund? A24. Yes, thus the specific tax type pertaining to the refund on enoneous payment referred to Section 12 shall not be covered by the availment. Q25. Can a taxpayer with a claim for tax credit or refund avail of the VAPP under Section 9.a? If the taxpayer has a pending claim, e.g. for VAT refund, under process in a BIR effice, will the required audiVverification to process the claim be continued? A25. Yes, a taxpayer with a provided that the claim

regular claims on tax types under secton 9'a, the the oitt claim shall be continued, even waived his right to such claim. For if uuaiyrerincaiion and procesri"g " coffesponding ta:r type is included in th9 avai]merttt Q26. Is a taxPaYer who failed to withhold and remit withhelcl taxes in 2018 qualified to avail of the VAPP under Section 9.b of RR 2l-202A? 426. Yes, under the condition that the amount not withheld and not remitted has to be paid total taxes remitted for 20 I 8 which shall be first and the .u*.-tftuf f form part of the percent (5%) required amount to be paid to the taxable base indetermining the five avail of the benefits under VAPP' . t* Q27 (CGT) and Documentary Inillustration 4 shown in RR 21.2020, the capital q11' amount between the zonal Stamp Tax (DsTiwere computed based on the higher value(ZV)andfairmarketvalue(FMV)oftheproperty,whyisthesellingprice (SP) not considered? . M7 Theillustation failed to state the SP in the given facts but it does not mean that CGT aZpnrVodpaDesSrdtTye.tseInrtmahrianos"nOtoryUbuVeetbtcraeosmgedpiRuotneodrthtbehaesheiFgdMhoeVnstwavshaiilcnuhdeeicvaaemtreodinsgitnhtehtheheiSgTPha'exZr VDvaeloucrleaFrbaMettiVwon'eeonf the the Q28. Does the exception in Section 3.d of RR No . 2l-2020 "with pending cases" include comply with an issued Subpoena Duces Tecum? those who failid to A2g. No, if no criminal case has been filed in court yet for failure to comply with the SDT' Q29. If the taxpayer is currently under audit/investigation for 2018 and he availed of the VAPP but the application and awaiting approval in the is still under evaluation investigating office, will the audit be continued? pp9. Theconduct of audit shall be suspended while the availment is under evaluation' upon issuan." oiu certificate of Availment, the electronic Letter of Authority and other related notices shall be withdrawn and canceled Q30. Ifthe taxpayer has an on-going investigation or a duly issued but protested Final 8, can he avail of the program? wt-ll Assessment Notice (FAN) , -fo iotl and/or 201 on the FAN the amount of the propos.d d.fi.i"r.y tax or the assessment appearing required for be taken into account in computing ihe minimum voluntary payment VAPP? A30. Yes, he can avail of the VAPP, but the availment will not cover taxable year 2017 ' The amount on the FAN for the 2018 audit case will, in no way, affect the computation of the voluntary payment for VAPP' Q31. What FANs are considered final and executory? A31. per RMO No. ll-z}l4,FANs are final executory if not protested within the thirty (30) -day period from receipt, if not appealed to the commissioner or the cTA wrAuepsiitsnpirevriosensrsumtttlir-geo"anfttttithoierntbyrwOe(qi3teuh0eji)s,nt-idtfnhoaerycrasepiiieexnvrtyoieofsd(t6figaf0raio)ltu-miorden-ar,itycooerpispeinutribocomadfsiettthotoehfsfeFhuiibdnlumoarcleiutDmttehoecenaistpdsiopoenrceauloqmtunoeirDnethitdsespucfurpTtoeomAdn

..\.tjl: 30 da1.s from the inaction of the BIR after 180 days from the appeal on the iDD-{. e-12-. \\hat is the starus of FANs not protested in thirty (30) days from receipt but the same - are not y-et recorde-d aiAccounttReceivable since the docl(ets are notyet transmified to the Collection Division of the Revenue Region/LT Collection Enforcement Division in the National Office? A32. They are final and executory. Q33. Can tarpayers with duly issued but protested Final Assessment Notices (FANs) avail of the VAPP? A33. Ytheese,pifreocvtiidvietydtohfethFeANresgaurleaftoiorntasxaanbdleaylei taarx20tylpse,asreosftthileluntad:<eprpayroerteasretocnoovrebreefdorine the availment' Q34. How will concerned offices, e.g. the investigating, reviewilg and legal offices, be if the cases pending with them for appropriate action pertain to taxpayers informed who had been issued a Certificate of Availment (CA)? A34. The taxpayer should give a copy of the Payment Form, proofs of payment and cA to the concerned office. Q35. If the tarQayer with FAN has a duly issued cA after availing of the VAPP, how will the assessment be cancelled? Is there a need to issue an Authority to Cancel Assessment (ATCA)? A35. yes. In all instances where there will te a cancellation or reduction of assessment per FAN, an ATCA should be approved and issued by the authorized revenue official in accordance with existing policies and procedures' Q36. In case of denial of the availment, will the taxpayer be notified? 436. yes, the head ofthe processing office should issue a letter informing the taxpayer of the denial and the reason(s) therefor. e37. If the taxpayer availed of the VAPP under Section 9.c, when will the electronic Certificate Authorizing Registration (eCAR) be issued? A37. The eCAR shall be issued within five days from the issuance of the CA. Q38. If a taxpayer who was notified to rectiff the deficiencies !n the availment or to pay the additional voluntary tax but fails to do so within ten (10) days from receipt of_the notification, can he comply before the deadline of December 31,2020 and qualifr forthe benefit of the VAPP? A38. No. The RR does not state any allowance or extension for the rectification. Q39. If the availment is denied or the CA has been invalidated pursuant to Section No. 1 1 of the RR despite payment of the voluntary tax, what lvill be the treatment of the payment? A39. In case the taxpayer's availment rendered auditlinvestigation under existing rules

approval of the Commissioner of tlti1nat R:ltlu",*v Y:ly]fl]T|iifd-:bIv the ;ais;s;e;;s;srm;ieRntisof.o'nr Ntaxoa.b0le6y2"2*szhoat lgl.,cporonvisdetidtu, ttheaat ltnu"ahl'pmay1m1e]n.:t1in1cl1ud*:efs'::th:"e1s"pie:,c:ific tax types and taxable peiiod covered by the assessment noticet Q40. If the taxpayer paid the ta:t for the vAPP on or before December 31,202A and the concerned BIR office, what will be submits the application after the deadline to the effect on the aPPlication? A40. Ivisfattlhihdeeitipyeaaoyfmtretner,entthaisivsaoictnmaonernbbteewfcoiorllendsDeidepecerenedmdbuaepsrona3vlt,ha2eiole2ddOocoubfmuwteisnthutsbinmsuitsbhsmeioidtnteeodafdatlhinnede'tahHpepoalwicmeaovtiueonrn't of voluntary Payment. All are enjoined to give this Circular a wide publicity as possible' F CAESARR. DULAY ' Commissioner of Internal Revenue 0 37 0 3 g I-1