WHAT'S INSIDE THE TAX AMNESTY BILL?

WHAT'S INSIDE THE TAX AMNESTY BILL?

THE TAX AMNESTY BILL IS ENTITLED AS " AN ACT ENHANCING REVENUE ADMINISTRATION AND COLLECTION BY GRANTING AN AMNESTY ON ALL UNPAID INTERNAL REVENUE TAXES IMPOSED BY THE NATIONAL GOVERNMENT FOR THE TAXABLE YEAR 2017 AND PRIOR YEARS WITH RESPECT TO ESTATE TAX, OTHER REVENUE TAXES, AND TAX ON DELINQUENCIES. "

The Tax Amnesty Bill  has already passed by the bicameral committee ( the Senate and the House of Representative).  The bill then will be submitted to the President for his final approval and signature.

It would grant those who have failed to pay for taxable year 2017 and prior years a one-time opportunity to settle tax obligations. 

Under the bill, there will be 3 types of tax amnesty: 

a) General Tax Amnesty;

 b) Tax Amnesty on Delinquencies; and 

c) Estate Tax Amnesty. The following are the salient provisions of the bill:

Here's a summary of what's inside the bill:

GENERAL TAX AMNESTY (GTA)

The GTA covers all national internal revenue taxes such as, but not limited to, 

1. income tax, 

2. withholding tax (except those withheld but not remitted),

3. capital gains tax, donor’s tax, 

4.VAT,

5.  other percentage taxes, 

6. excise tax and 

7.DST collected by the BIR, 

8. including VAT and excise taxes collected by the Bureau of Customs (BOC) for taxable year 2017 and prior years, with or without existing assessments, that have remained unpaid.

Any person, whether natural or juridical, has the following options to avail of the GTA:

Option 1 – Pay an amnesty tax at the rate of 2% of the taxpayer’s Total Assets as of December 31, 2017 as declared in the SALN.

Option 2 – Pay an amnesty tax based on Total Net Worth as of December 31, 2017 as declared in the SALN at the following rates:

Individual (whether resident or non-resident citizens, including resident or non-resident aliens), Trusts and Estates
5% of the Net worth or P75,000, whichever is higher

Corporations:

With subscribed capital of above P50 million
5% or P1,000,000, whichever is higher

With subscribed capital of above P20 million up to P50 million
5% or P500,000, whichever is higher

With subscribed capital of P5 million up to P20 million
5% or P250,000, whichever is higher

With subscribed capital of below P5 million
5% or P100,000, whichever is higher

Other juridical entities, including, but not limited to, cooperatives and foundations, that have become taxable as of December 31, 2017
5% or P75,000, whichever is higher

The GTA shall be availed of within 1 year from the effectivity of the IRR by filing a sworn General Tax Amnesty Return, with the notarized SALN as of December 31, 2017.

The Statement of Total Assets and SALN shall be conclusively presumed as true, correct, and final upon filing and shall be deemed complete upon full payment of the amount due.

The taxpayer shall be entitled to a corresponding reduction in the total amnesty tax due if the tax amnesty is availed of within the following periods:

If paid on or before the end of the 3rd calendar month from the effectivity of the IRR
20%

If paid after the end of the 3rd calendar month until the end of the 6th calendar month from the effectivity of the IRR
15%

If paid after the end of the 6th calendar month until the end of the 9th calendar month from the effectivity of the IRR
10%

TAXPAYERS WHO AVAIL OF THE GENERAL TAX AMNESTY (GTA) SHALL BE ENTITLED TOT HE FOLLOWING IMMUNITIES AND PRIVILEGES: 

With respect to the years covered by the GTA, the taxpayer shall be immune from the payment of taxes and additions thereto, as well as the related civil, criminal, administrative cases and penalties under the Tax Code, arising from the failure to pay any and all internal revenue taxes for taxable year 2017 and prior years, insofar as they relate to the assets, liabilities, net worth, and internal revenue taxes that are subject of the amnesty.

Any information or data contained in the Tax Amnesty Return, Statement of Total Assets or SALN, and appurtenant documents shall be confidential and shall not be used as evidence in any investigation or prosecution before any judicial, quasi-judicial and administrative bodies.

THE BOOKS OF ACCOUNT S AND RECORD OF THE TAX PAYER FOR THE YEARS COVERED BY THE TAX AMNESTY SHALL NOT BE EXAMINED BY THE BIR

TAX AMNESTY ON DELINQUENCIES (TAD)

The TAD covers all national internal revenue taxes such as, but not limited to,

1.income tax, withholding tax (including those withheld, but not remitted), 

2. capital gains tax, 

3. donor’s tax, 

4. VAT, 

5. other percentage taxes, 

6. excise tax 

7. and DST collected by the BIR, 

8. including VAT and excise taxes collected by the BOC for taxable year 2017 and prior years.Below are the instances when TAD may be availed and the corresponding tax amnesty rates:

Delinquencies and assessments, which have become final and executory
- 40% of the basic tax assessed

Tax cases subject of final and executory judgment by the courts
- 50% of the basic tax assessed

Pending criminal cases with the Department of Justice (DOJ) or the courts for tax evasion and other criminal offenses under Chapter II of Title X and Section 275 of the Tax Code
- 60% of the basic tax assessed

Withholding tax agents who withheld taxes but failed to remit the same to the BIR

- 100% of the basic tax


Those are the salient of features of the Tax Amnesty bill.
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