Tuesday, November 13, 2007 Tax notes: BIR memo on tax amnesty
THE Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular (RMC) 69-2007 which clarifies issues regarding the implementation of the Tax Amnesty Law under Republic Act 9480.
The said RMC, which is in question and answer format, addresses the most common issues raised by taxpayers relative to the availment of the tax amnesty. Among the clarifications made by the circular are as follows:
1. The tax amnesty covers taxable year 2005 and all prior years, with or without assessments duly issued therefore that have remained unpaid as of Dec. 31, 2005. For taxpayers on fiscal year accounting period, the balance sheet for taxable year ending in any month prior to Dec. 31, 2005 shall be used for purposes of availing the tax amnesty;
2. For taxpayers who had been filing their correct tax return and have no additional assets to declare further, but would like to participate in the amnesty program, they are required to pay five percent of their total declared networth as of balance sheet date in 2005 or the prescribed minimum absolute amount, whichever is higher;
3. If the taxpayer avails of the tax amnesty, amendment of the 2006 Financial Statements shall be allowed even if Letters of Authority (LOA), Tax Verification Notices (TVN), or Audit Notices have already been issued;
4. Delinquent accounts/accounts receivable, including unpaid self-assessed taxes, in the records of the BIR are excluded from the coverage of the tax amnesty program since these are already properties/assets of the Government prior to or upon the taxpayer’s date of amnesty availment;
5. Taxpayers who have availed themselves of the program can still be issued LOAs or TVNs, but the audit shall be limited only to withholding taxes, unpaid self-assessed taxes and funds collected from customers held in trust for the government;
6. Those cases involving issues that have already been ruled by the trial court/appellate court in favor of the BIR/Government prior to the taxpayer’s availment of the tax amnesty are not covered by the program;
7. Only companies reflecting positive networth can avail of the tax amnesty law;
8. Taxpayers have up to March 6, 2008 to avail themselves of the tax amnesty program.
With the foregoing clarifications, a more definitive guide is available to interested taxpayers in determining whether or not they should take advantage of the program.
