(Revenue Regulations No. 21-2018, September 14, 2018)
Pursuant to the TRAIN law, the interest on deficiency and delinquency taxes shall be double the effective legal interest. In RR 21-2018, the BIR clarifies the following:
- The deficiency interest shall be 12% per year which is double the 6% legal interest on loans pursuant to BSP Memorandum No. 799, s. 2013.
- The deficiency interest shall be imposed from the date prescribed for payment until full payment or until issuance of notice and demand by the BIR, whichever comes first.
- The delinquency interest shall be imposed from the time of issuance of the notice and demand until the tax is fully paid. Deficiency and delinquency interest shall not be imposed simultaneously. However, the deficiency interest accumulated as of the issuance of the notice and demand shall also be subject to delinquency interest, together with the basic taxes.
- The lower 12% rate of deficiency/delinquency interest shall be effective only beginning January 1, 2018. Hence, in case the liabilities became due before, and will be paid after January 1, 2018, the 20% rate shall apply for the period until December 31, 2017 and the 12% for the period beginning January 1, 2018 until paid.
The provisions of RR 21-2018 shall be effective beginning January 1, 2018.
