RR No. 21-2018 — Implements Section 249 (Interest) of the National Internal Revenue Code of 1997, as amended under Section 75 of RA No. 10963 (TRAIN Law) (Published in Manila Bulletin on September 17, 2018) Digest | Full Text

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City September 14, 20 I 8 4nap REvENUE REGULATToNS No. el- LO\S SUBJECT : Regulations fmplementing Section 249 (lnterest) of the National Internal Revenue Code (NIRC) of 1997, as amended under Section 75 of the Republic Act (RA) No. 10963 or the 'oTax Reform for Acceleration and Inclusion (TRAIN Law),' TO : All Internal Revenue officials, Employees and others concerned SECTION f- SCOPE. * Pursuant to the provisions of Sections 244 and 245 of the National InternalRevenue Code of 1997 (TaxCode), as amended, and Section 84 of Republic Act (R.A) No. 10963 otherwise known as the "Tax Reform for Acceleration and Inciusion (TRAIN) Law, these Regulations aro hereby promulgated to implement Section 249 (lnterest) of the Tax Code, as amended by the TRAIN Law. SECTION 2. RATE OF INTEREST. - There shall be assessed and collected on any unpaid amount of tax, interest at the rate of double the effective legal interest rate for loans or forbearance of any money in the absence of an express stipulation as set by the Bangko Sentral ng Pilipinas (BSP) frorm the date prescribed for payment until the urounii, fully paid. The rate of interest per BSP Memorandum No. 799 series of 2013 for loans or forbearance of any money in the absence of an express stipulation is six percent (6%). Thus, the rate of legal interest imposable under Section 249 of the Tax Code, ai amended, shall be twelve percent (12%). A Circular shall be issued by the Commissioner in case BSp prescribes new rate of interest. SECTION 3. DEFICIENCY INTEREST. - Interest imposed on any deficiency tax due, which inierest shall be assessed and collected from the dati prescribed for its payment until: (a) full payment thereof, or (2) upon issuance of a notice and demand by the commissioner or his authorized representative, whichever comes first. SECTION 4. DELINQUENCY INTEREST. - Interest imposed on the iailure ro pay: (l) The amount of the tax due on any return to be filed;or (2) The amount of the tax due for which no return is required; or (3) A deficiency tax, or any surcharge or interest thereon on the due date appcaring in the notice and demand of the Commissioner or his authorizecl representative until the amount is fully paid, which interest shall form paft of the tax. SECTION 5. NO DOUBLE IMPOSITION OF INTEREST. - Upon the effectivity of the TRAIN Law, in no case shall the deficiency and delinquency interest prescribed herein be imposed simultanecusly. Illustration l: Mr. A has been assessed deficiency income tax of P1,000,000.00, exclusive of interertllq ty.&.gg, f"ltaxable yea r 201g. The SU|EAU OF lN?Erxr[ r?f vF-nur

Ret, enite Regulations No. Page 2 of'3 tax liability has remained unpaid despite the lapse of June 30, 2020, the deadline for payment stated in the notice and demand issued by the Commissioner. Payment was made by the taxpayer on February 10, 2021. The applicable interest shall be computed as follows: Basic Tax Due - Incor-ne Tax P 1,000,000.00 Add: 25%o Surcharge for late paylnent P 250,000.00 127o Deficiency Interest from 04.16.2019 to 06.30.2020 (442 days) r 45,3 r s.07 395,315.07 Total Amount Due, June 30,2020 P I,395,3 15.07 Add: l2oh Delinquency lnterest liorn 07.01.2020 to 02.10.2021 (225 days; based on total atnount due 103,21s.09 of P1,395,315.07 as of 06.30.2020) Total Amount Due, FebruarY 10,2021 P _ll2!_,s!!=l s_ SECTION 6. TRANSITORY PRO\ISION. - In cases where the tax liability/ies or deficiency taxles became due before the effectivity of the TRAIN Law on January 1,201 8, and where the full payment thereof will only be accomplished after the said effbctivity date, the interest rates shall be applied as follows: Period Aoolicable Interest Type and Rate For the period up to December 3 1, 2017 Deficiency and/or delinquency For the period January i , 20 1 8 until full payment of the tax liability interest at 20%o Deficiency and/or delinquency interest at l2%o The double imposition of both deficiency and delinquency interest under Section 249 prior to its amendment will still apply in so far as the period between the date prescribed for payment until December 31 ,2017. Illustratiott 2.' A Cornpany has been assessed deficiency income tax of P1,000,000.00, exclusive of interest and surcharge, fortaxable year20i5. The tax liability has remained unpaid despite the lapse of June 30, 2017, the deadline for payment stated in the notice and demand issued by the Commissioner, Payment was made by the taxpayer only on February 10, 2018. The civil penalties fbr late payment shall be computed as follows: Basic Tax Due - lncome Tax P 1,000.000.00 Add: 25o/o Surcharge lbr late pavment P 250,000.00 20% Deficiency Interest fi'om April 16,2016 to June 30, 201 7 (441 days) 241.643.84 491.643.84 I,491,643.84 Total Amount Due, June 30,2017 Add: 20o/o Deficiency htterest l}om .luly 1.2017 to December 3l^2017 ( 184 days; based on basic tax of P r,000.000.00) P 100.821 .92 20o/oDelinquency lnterest lrom july 1.2017 to Duuettri,ct i l. :tr ll r iii-l J". .. l'r.'.J ui ..,lul amount due o1' P I .491 .643 ,84 as of'June 30,2017 ) 150.3 90.39 12% Delinquencl' Interest fiom Januaq 1. 201 8 to February 10. 2018 (4 1 da:'s; based on iotal amount 20. r 06.54 271.1 Iti.85 due o1I'}1.491,643.81 as ol june 30.2017) P --|36IW.A- Total Amount Due on February 10,2018

Reveniie Regulations N o Page 3 oJ'3 - SECTION 7. REPEALING CLAUSE. Any ruies and regulations, issuances or parts thereof inconsistent with the provisions of these Regulations are hereby repealed, amended or modified accordingly. - SBCTION 8. SEPARABILITY CLAUSE. lf any of the provisions of these regulations is subsequently declared unconstitutional, the validity of the remaining provisions hereof shall remain in full force and effect. - SECTION 9. EFFECTMTY. These Regulations are effective beginning January 1,20i8, the effectivity of the TRAIN Law. CARLOS G. DO Secretary of Finance li l,i"ir 2tiE Reoommending Approval : -^rU^"*^^$? CAESAR R. DIJLAY Commissioner of Internal l{evenue 019003 K