Tax Amnesty Act
On 14 February 2019, Republic Act No. 11213 or the ‘Tax Amnesty Act’ was signed into law, and was published in the official gazette on 18 February. The law grants Estate Tax Amnesty and Tax Amnesty on Delinquencies (TAD).
Under Estate Tax Amnesty, the estate of decedents who died on or before 31 December 2017, with or without assessments duly issued, may avail of the estate amnesty tax rate at 6% of the decedent’s total net estate at the time of death, or 6% of the decedent’s undeclared estate if an estate tax return was previously filed with the Bureau of Internal Revenue (BIR). A minimum estate amnesty tax of 5,000 Philippine pesos (PHP) shall be paid if the allowable deductions applicable at the time of death exceed the value of the gross estate. The return shall be filed within two years from the effectivity on 15 June 2019.
The TAD shall cover all national internal revenue taxes for taxable year 2017 and prior years, which include, but are not limited to: (i) income tax; (ii) withholding tax (WHT); (iii) capital gains tax; (iv) donor’s tax; (v) value-added tax (VAT); (vi) other percentages taxes; (vii) excise tax and documentary stamp taxes collected by the BIR; and (viii) VAT and excise tax collected by the Bureau of Customs.
The TAD may be availed of in the following instances and by paying the corresponding amnesty tax:
|Delinquencies and assessments that 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 criminal information filed with the Department of Justice or the courts for tax evasion and other criminal offenses under Chapter II of Title X, and Section 275 of the Tax Code, with assessments duly issued||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 assessed|
Certain immunities and privileges are available to taxpayers who availed of the tax amnesty and have fully complied with the conditions thereof. The TAD availment procedures (i.e. submission of complete documents and payment of the amnesty tax) shall be completed within one year from its effectivity on 24 April 2019.
On 19 June 2020, the BIR issued Revenue Regulations (RR) No. 15-2020 to extend the above period for the availment of TAD and the submission of the complete documentary requirements and proof of payment until 31 December 2020, subject to the amended procedures under the RR.
Further amendments to excise tax provisions of the Tax Code
On 22 January 2020, the President enacted Republic Act (RA) No. 11467 which amended or introduced the following Tax Code provisions:
- VAT-exempt sale or importation of certain prescription drugs and medicines (Section 109(AA))
- Excise tax imposition and administration with respect to distilled spirits (Section 141), wines (Section 142), fermented liquors (Section 143), and tobacco products, heated tobacco products and vapor products (Section 144)
- Definition of “vapor products” (Section 147(f))
- Fines on the unlawful possession or removal of articles subject to excise tax without payment thereof (Section 263), selling of heated tobacco products and vapor products at a lower price than the combined excise tax and VAT (Section 263-A), and offenses relating to stamps (Section 265).
- Disposition of revenues from excise taxes on sugar-sweetened beverages; alcohol; and heated tobacco products and vapor products. (Section 288-A)
- Creation of a Joint Congressional Oversight Committee on Illicit Trade on Excisable Products (Section 290-A)
RA No. 11467 took effect on 1 January 2020 after its publication in the Official Gazette on 23 January 2020.