The tax amnesty solution
courts for tax evasion and other criminal offenses; cases with final and executory judgment by the courts; and withholding tax liabilities of withholding agents arising from their failure to remit withheld taxes.
Those availing of the TA on delinquent accounts have until one year from the effectivity of the rules or April 23, 2020 to complete the payment of the amnesty tax and submit all documentary requirements. The guidelines issued by the BIR and the Tax Amnesty Return (“TAR”) or BIR Form 2118- DA contain the details of the documentary and procedural requirements.
The first requirement for the first category of tax delinquencies is to secure a certificate of tax delinquencies ( CTD) from the BIR office concerned. The BIR is mandated to submit the CTD to the taxpayer who requests the same within the day of application. The requirements for the second category of TA case are different as prescribed in the guidelines,
The TAR and the acceptance payment form ( APF) or BIR Form 0621- DA can be accomplished without too much difficulty. The TA rates for the different cases are the following:
– 40 percent of basic tax for delinquent accounts in the first category;
– 50 percent of basic tax for tax cases subject of final and executory judgment by the courts;
– 60 percent of the basic tax for criminal cases pending with the DoJ/ prosecutor’s office or the courts; and
– 100 percent of the basic tax for unremitted withholding taxes.
Once the TAR and APF are accomplished, these are to be submitted to the BIR office concerned. The BIR will review and endorse these back to the taxpayer, with the APF bearing the signature of the authorized BIR officer.
The taxpayer can now proceed with the payment of the amnesty tax to the authorized accredited agent bank or rev
merely presenting the APF. There is no need to present the TAR or any supporting document to the bank or RCO. Instead, all of the documents, including the TAR, bank-validated APF and support
- cerned after the payment. Taxpayer will be given the received copy of all of these documents,
Within 15 calendar days from the submission to the BIR, the authority to cancel ( ATCA) will be issued by the BIR to the taxpayer. The ATCA will be the basis for the closure of the cases of taxpayers with delinquent accounts. Thereafter, the taxpayer can finally relax knowing that his tax cases are finally settled and henceforth “start clean” with the BIR moving forward.
TA on estate tax
One of the common tax problems that my clients, relatives and friends present to me is how to resolve their long- pending estate tax issues. Most of them have been unable to transfer to the rightful heirs the properties left by their ancestors since the required estate tax payments and clearances have not been completed after so many years since the decedent’s death. Consequently, they have not been able to put to maximum productive use these properties due to constraints of the unsettled estate tax and ownership issues.
With the passage of RA 11313 providing for a tax amnesty on estate tax, is the resolution of this problem forthcoming? This TA provides for the settlement of the tax obligations of estates of decedents who died on or before Dec. 31, 2017, with the payment of TA of 6 percent of the estate value. There are no interest or other penalties on late payment of these estate taxes for those availing of the tax amnesty. This can result in a hefty amount, especially for those estate tax cases which were supposed to have been payable for a long time already. It is to be noted that for estates of decedents who died after Dec. 31, 2017, the estate tax provisions under the Tax Reform for Acceleration and Inclusion law will apply, including the 6 percent estate tax rate similar to the TA estate tax rate
The TA on estate tax provides a relief for the administrators of and heirs to estates who have not been able to pay the estate taxes on properties left by decedents. Several issuances have been promulgated by the Department of Finance and the BIR for this TA, including Revenue Regulations ( RR) 6- 2018, Revenue Memorandum Order 33- 2019, and Revenue Memorandum Circular 68- 2019. It is expected that additional guidelines will be issued on this in the near future.