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Digesting BIR RR-21-2020 - VAPP

by: Mark Virgil Lofranco, CPA



Voluntary Assessment and Payment Program for Taxable year 2018 under Certain Conditions

 

Covered Taxes and Taxable Year; when to avail

 

When to avail?

 

Covered Person


 

 

Not covered

 

How to apply?



Mandatory Requirements?

 

 

Additional Requirements

 

 
Manner of Payment


 Mode

 

All voluntary payments should be made in cash.

Tax debit memo is not a valid payment

 

Place

 

The duly accomplished form no. 0622 shall be presented for payment to any BIR authorized agent bank or authorized collecting agent under registered RDO.

If ONETT involving sale of property, it must be filed and paid under the RDO where the property is located

 

Proceeding during review

 

Within 30 days

 

the Revenue Officer will evaluate the application, payment form and other documents submitted

endorse them to the assistant chief,  LT office/Assistant District Officer for review

endorse to the chief, LT office/revenue district officer, as the case may be, for approval

BIR form 2119 shall be signed by  the chief, LT office/revenue district officer

 

If the review reveals deficiencies or defects, the approving official shall notify the applicant through email address provided and shall require to rectify the defects and/or comply with or pay the deficiencies within 10 working days from receipt of the notification/email.

 

Failure to act and/or pay the required amount within the period shall result to the denial of the application.

 

A certificate of availment shall be issued within 3 working days from approval of the application as a proof of the availment, compliance with the requirements and entitlement to the privilege.

 

The LT office or RDO shall transmit all dockets on approved VAPP applications to the concerned reviewing office not later than the 5th day following the month of issuance of the Certificate of availment for post review.

 

 

 

 

 

 

Consequence of non-submission; erroneous submission, incomplete/falsified submission; treatment of invalid/deficient or defective availment

 

Shall not entitle to avail of the privilege thus voluntary payment may be applied against any deficiency tax liability for the taxable year 2018 in case of audit/investigation

 

Taxpayer’s failure to file and pay tax returns for the covered taxable year; condition to avail

 

If the unfiled tax returns shall first be filed and/or

If the unpaid taxes plus corresponding penalties for late filing and payment shall first be paid

 

Condition to avail the privilege; amounts to be paid

 

The amount of taxes to be paid as a condition to avail the privilege:

 

Income Tax, VAT, Percentage Tax, Excise Tax and Documentary Stamp Tax other than DST on ONETT

 

Increase/Decrease in total taxes due from 2017 and 2018
Amount of voluntary tax payment (whichever is higher)
 Net increase of not more than 10%
3% of 2018 gross sales OR 7% 2018 taxable net income
 
 
Net Increase of more than 10% up to 30%
2% of 2018 gross sales OR 6% of 2018 taxable net income
 
 
Net increase of more than 30%
1% of 2018 gross sales OR 5% OF 2018 taxable net income
 
 

 

 

 
Minimum amount
 
For individuals, estates and trusts
P75,000.00
 
For corporations
Subscribed capital of more than P50 Million
 
P1,000,000.00
For corporations
Subscribed capital of more than P20 Million-P50 Million
 
P500,000.00
For corporations
Subscribed capital of more than P5 Million-P20 Million
 
P250,000.00
For corporations
Subscribed capital of P5 Million and less
 
P100,000.00
Other juridical entities including but not limited to cooperatives, general professional partnerships
P75,000.00

 

Final withholding taxes (Compensation, fringe benefits, etc.), Creditable withholding taxes other than CWT on ONETT

 

Amount shall be 5% of the total basic withholding tax remittance for the taxable year 2018

 

For taxpayers with claims for tax refund/credit, the application shall constitute a waiver of such claims unless they exclude in their availment the specific type for which they are pursuing the claim for tax credit/refund.

 

Taxes on ONETT such as Estate tax, donor’s tax, Capital gains tax, ONETT-related CWT/Expanded withholding tax and DST

 

Amount paid shall be the basic tax due of the unfiled tax return/unpaid tax due plus 5%.

 

Benefits and Privilege

 

Shall not be audited for 2018 for the tax types covered by the availment

If the covered taxable period are currently being audited, the conduct of the audit shall be suspended upon the availment of the VAPP while the availment is under evaluation. It shall resume of the availment has been found invalid.

If the availment has been determined to be valid, a certificate of availment shall be issued and the Letter of Authority, Tax verification notice, discrepancy notice, notice of informal conference, preliminary assessment notice, final assessment notice for pending cases shall be withdrawn and canceled.

 

Instances where audit and investigation are still allowed despite the issuance of certificate of availment:

 

There is strong evidence or finding of under-declaration of sales, receipts or income or overstatement of deductions by more than 30% based on written report of the appropriate revenue official stating the facts with supporting documents

There is verifiable information that the taxpayer has withheld but failed to remit withholding taxes

 

Non-availability of cash refund or credit; non-admission of fraud or erroneous payment

 

Any payment made is construed as a waiver for the right to claim for refund or credit notwithstanding collection from erroneous payment.

 

The act of voluntary payment shall not be deemed as an admission on the part of the taxpayer that there was fraud in the declaration of its taxes and/or there was an intention to pay the tax erroneously.