ratified the bicameral conference committee report on the Act on December 12 and 13, respectively. The Act has been submitted to President Duterte for him to sign it into law.

One of the objectives of the Act is to provide a one-time opportunity for taxpayers to settle tax obligations that remain outstanding as of Dec. 31, 2017 through a tax amnesty program which seeks to simplify tax compliance requirements. Taxpayers who will avail of the tax amnesty shall be immune from payment of taxes and from additional civil, criminal, and administrative cases and penalties arising from the failure to pay any internal revenue taxes for taxable year 2017 and prior years.

The Act is comprised of three separate tax amnesty programs: Estate Tax Amnesty, General Tax Amnesty and Tax Amnesty on Delinquencies.

The Estate Tax Amnesty provides for an amnesty tax of 6 percent based on the decedent’s total net estate at the time of death, which can be availed of by estates of decedents who died on or before Dec. 31, 2017, and whose estate taxes remain unpaid as of Dec. 31, 2017.

The General Tax Amnesty covers all national internal revenue taxes (i.e., income tax, withholding tax, value-added tax, etc.), with or without assessments, that have remained unpaid as of Dec. 31, 2017. A taxpayer has the option of paying the amnesty tax at the following rates:

–2 percent based on the taxpayer’s total assets (gross) as of Dec 31, 2017; or

–Based on the taxpayer’s total networth as of Dec. 31, 2017 as declared in a Statement of Assets, Liabilities, and Networth (SALN) and in accordance with the following schedule:

–For individuals, trusts and estates, the amnesty tax is 5 percent or P75,000, whichever is higher.

–For corporations, the amnesty tax is a flat rate of 5 percent of net worth, or graduated amounts of minimum amnesty tax payments, whichever is higher, depending on the amount of the corporation’s subscribed capital. For example, corporations with a subscribed capital of more than P50,000,000 will have to pay an amnesty tax of 5 percent based on its networth or P1,000,000, whichever is higher.

As for the Tax Amnesty on Delinquencies, any person may enjoy the benefits and privileges of the tax amnesty by paying the following tax amnesty rates: 40 percent of the basic tax in cases of tax delinquencies and assessments which have become final and executory; 50 percent of the basic tax for cases subject to final and executory judgment by the courts; 60 percent of the basic tax for ongoing tax evasion cases; and 100 percent of the basic tax for withholding agents and their withholding tax liabilities.

The Estate Tax Amnesty may be availed of within two years from the effectivity of the Implementing Rules and Regulations issued by the Department of Finance (DoF) and the Bureau of Internal Revenue (BIR), while an application for the General Tax Amnesty and the Tax Amnesty on Delinquencies may be filed within 1 year from the effectivity of the IRR.

If the Act comes into law by the end of the year, we can expect the DoF/BIR to issue the IRR soon after. With that, there is the possibility that an application for tax amnesty may be filed with the BIR during the first quarter of 2019.

With the possibility of the program being the last tax amnesty measure to be enacted (as far as the current administration is concerned), delinquent taxpayers should keep their eyes peeled to grab the chance to start anew, a chance for a clean slate.

Merry Christmas to all!

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW