Revised policies on the execution of waivers

(Revenue Memorandum Order No. 14- 2016, April 4, 2016)

This Tax Alert is issued to inform taxpayers of the revised procedures and policies for the proper execution of waivers from the defense of prescription pursuant to Section 222 of the National Internal Revenue Code (NIRC) of 1997 is revised.

The revised policies aim to address rampant practice by taxpayers of contesting the validity of their own waivers after having availed of the benefits thereof.

Waivers may be, but not necessarily, in the form prescribed by RMO No. 20-90 or RDAO No. 05-01. Compliance with the following shall render the waivers valid:

a. Waiver shall be executed before the expiration of the period to assess or collect taxes. The date of execution shall be specifically indicated in the waiver.

b. Waiver shall be signed by the taxpayer himself or his duly authorized representative. For corporations, any responsible official may sign the waiver.

c. Expiry date of the agreed period to assess/collect the tax after the regular three-year period of prescription should be indicated. 

The particular taxes or amount need not be specified considering that the amounts may not yet be determinable at the time of the execution.  It may simply state “all internal revenue taxes”.

Since the taxpayer is the applicant, he is charged with the burden of ensuring that the Waiver is validly executed, as follows:

  1. The Waiver shall be binding on the taxpayer upon its execution.
  2. Taxpayer cannot anymore contest the authority of the signatory for purposes of invalidating the Waiver. 
  3. lt shall be the duty of the taxpayer to submit its duly executed Waiver to the official designated in existing issuances or the RDO or group supervisor as designated in the LOA who shall then indicate acceptance by signing the same. Such Waiver shall be executed and accepted prior to the expiration of the period to assess or to collect. The taxpayer shall have the duty to retain a copy of the accepted Waiver.        

All provisions of RMO 2-90 and other issuances inconsistent with this RMO are repealed or modified accordingly.

You may access copy of the RMO through the link below.