Tax Amnesty Act of 2018
Credit to Author: ATTY. PEACHES ARANAS| Date: Sat, 29 Dec 2018 16:19:07 +0000
(Part 2)
In last week’s article, we talked about the “Tax Amnesty Act of 2018” (Act), which was ratified by both houses of Congress. The Act has been submitted to President Rodrigo Duterte for him to sign it into law. The Act provides 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.
For this week, it would be helpful to look into the salient provisions of the Act, specifically with regards to one of the three tax amnesty programs, the General Tax Amnesty. To recap, 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 as declared in a notarized Statement of Total Assets (STA); or
–5 percent based on the taxpayer’s total networth as of Dec. 31, 2017 as declared in a notarized Statement of Assets, Liabilities and Networth (SALN), or graduated amounts of minimum amnesty tax payments, whichever is higher.
Specifically, the STA shall contain a declaration of total assets as of Dec. 31, 2017, as follows:
–Real properties shall be identified by its classification, exact location and valued at acquisition cost if purchased, or if acquired by inheritance or donation, the higher amount of the zonal valuation or fair market value as determined by the provincial and city assessors.
–Personal property should indicate the kind and number (automobiles, jewelry, shares of stock, etc.); the acquisition cost less accumulated depreciation; the book value for shares of stock; or the fair market value at the date of the STA, if acquired by inheritance or donation.
–Assets denominated in a foreign currency shall be converted into Philippine Peso prevailing at the date of the STA.
–Cash in Philippine peso on hand and in bank, as well as cash in foreign currency converted into Philippine peso prevailing at the date of the STA.
The SALN shall similarly contain the assets as described above, as well as the following additional items:
–All existing liabilities, indicating the name and address of the creditor and the total amount of the liability.
–The total networth of the taxpayer (total assets less total liabilities).
The STA or the SALN, as the case may be, shall be presumed as true, correct and complete upon full payment of the corresponding amnesty tax. The STA/SALN, together with a sworn General Tax Amnesty Return, shall be filed by the taxpayer to his concerned Revenue District Office (RDO). The RDO shall then issue an Acceptance Payment Form for an authorized agent bank to accept the amnesty tax payment. Once full payment is made, the RDO shall then issue a Certificate of Availment of the General Tax Amnesty within 15 days from submission of the required documents. In any case, duplicate copies of the STA/SALN, Acceptance Payment Form, and the General Tax Amnesty Return stamped received by the BIR, shall be sufficient proof that the taxpayer has availed of the tax amnesty.
Happy New Year to all!
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