Under the GTA, a taxpayer would have had the option of paying the amnesty tax at the following rates:

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

– 5 percent based on the taxpayer’s total networth or graduated amounts of minimum amnesty tax payments, whichever is higher, depending on the amount of the corporation’s subscribed capital.

Below is a table of the specific provisions of RA 11213 that were vetoed by President Duterte, as well as the corresponding justification for such veto: (See table at the right)

With the veto of the GTA, President Duterte called on Congress to pass another GTA bill that will include safeguards to ensure truthful asset or net worth declarations, as well as the automatic exchange of information. Notwithstanding the President’s pronouncement, it is unsure as to whether a GTA bill will be passed and signed into law within the year.

As it stands, RA 11213 is left with the remaining 2 separate tax amnesty programs: Estate 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 Estate Tax Amnesty may be availed of within 2 years from the effectivity of the Implementing Rules and Regulations (IRR) issued by the Department of Finance (DoF) and the Bureau of Internal Revenue (BIR).

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.

– 100 percent of the basic tax for withholding agents and their withholding tax liabilities.

The Tax Amnesty on Delinquencies may be filed within one year from the effectivity of the IRR.

Currently, the DoF/BIR are drafting the IRR, with the intention that tax amnesty applications may be filed, at the earliest, by the third quarter of 2019.

Manila Times Source

ATTY. RON ARRIESGADO

Partner LMA LAW