Further clarification on tax amnesty, Revenue Memorandum Circular 11-2020

THE Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular (RMC) 11-2020 on Feb. 6, 2020 to further clarify certain provisions in Revenue Regulations (RR) 4-2019, which implemented Title IV of Republic Act 11213, otherwise known as the “Tax Amnesty Act.” RMC 11-2020 amends and supplements certain items in RMC 57-2019, which was also issued to clarify the provisions of RR 4-2019.

The clarifications and addition addressed by RMC 11-2020 are as follows:

1. A clarification on Questions 22 and 23 of RMC 57-2019. The way the questions and corresponding answers were structured was changed for easier understanding. The dates were also updated. It now reads as follows:

“Q22: Will the liabilities covered by the FAN/FLD or FDDA, which was timely protested or disputed, but such to the FAN/FLD or appeal to the FDDA, as the case may be, was withdrawn on or before April 23, 2020 be considered delinquent account qualified for tax amnesty?

A22: Yes, if the protest or appeal was withdrawn at any time on or before April 23, 2020, and thus, the tax liabilities reverted back to being delinquent on or before April 24, 2019 (refer to next Q&A), provided that the delinquent account pertains to taxable year 2017 and prior years.

Q23: In relation to Q22, what is the effect of the withdrawal of protest/appeal to the FAN/FLD/FDDA?

A23: Upon the withdrawal of the protest or appeal to the FAN/FLD or FDDA, respectively, the effect is that it is as if no protest or appeal was filed, therefore, the assessment contained therein became final and executory, thereby delinquent, upon the lapse of the 30-day period, reckoned from receipt of such FAN/FLD or FDDA, within which to file a protest or appeal, as the case may be. In such case, the FAN/FLD or FDDA, whose protest or appeal was subsequently withdrawn, should have been received at the latest, on March 25, 2019, to be considered delinquent on or before April 24, 2019.”

2. A clarification on the answer of Question 29 of RMC 57-2019, which was about whether the taxpayer is considered to have fully complied with the requirements of RR 4-2019 if the tax amnesty was paid on the last day of the one-year availment period, but failed to file the Tax Amnesty Return (TAR) on the same date. RMC 11-2020 reiterates the answer that the taxpayer is considered not to have complied with the requirements of RR 4-2019 without the submission of the TAR. However, RMC 11-2020 further provides that the BIR has given an extension of 30 days to submit the complete documentary requirements for delinquent taxpayers who have secured the Certificate of Tax Delinquencies/Tax Liabilities and endorsement of the Acceptance Payment Form, but have paid the amnesty tax due on April 23, 2020, the last day of the availment period.

3. The following question was added to the list of questions enumerated in RMC 57-2019:

“Q40: What are the instances wherein the protest to the FAN/FLD or appeal to the FDDA will be considered invalid, making the assessment final and executory and therefore delinquent?

A40: The following instances are considered invalid making the assessment final and executory:

1. The protest to FAN/FLD was filed beyond 30 days from receipt of the FAN/FLD;

2. The appeal to FDDA was filed beyond 30 days from receipt of the FDDA;

3. The protest to FAN/FLD was not filed with the duly authorized representative of the CIR who signed the FAN/FLD;

4. The appeal to the FDDA was not filed with the Office of the CIR;

5. The protest/appeal failed to state the applicable law, rules and regulations or jurisprudence on which it is based;

6. The request for reinvestigation did not specify the newly discovered or additional evidence which the taxpayer intends to present as required in a valid protest.

An invalid protest or appeal does not toll the running of the 30-day prescriptive period to file such protest or appeal. Accordingly, the assessment becomes final and executory after the lapse of such 30-day prescriptive period, reckoned from receipt of the FAN/FLD or FDDA.”

Please be guided accordingly.

Source: P&A Grant Thornton

Certified Public Accountants

As published in SunStar Cebu, dated 25 February 2020