By: Hergie Ann De Guzman, CPA
The Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 21-2020 on September 4, 2020 to prescribe the guidelines on the implementation of the Voluntary Assessment and Payment Program (VAPP).
What is VAPP?
VAPP is one of the programs implemented by the BIR to provide funding for the needs of the Government during the current COVID-19 Pandemic. With the name itself, it is a scheme where taxpayers are encouraged to voluntarily pay taxes. The program is crafted to benefit both the taxpayers and the BIR. Taxpayers who will avail of the VAPP will be given the privilege of “no audit” for the year whereas the BIR will significantly reduce its administrative costs due to decrease in audit.
BIR is expecting for a successful implementation and outcome of this program as it can significantly help our Government cope up with the negative economic effects of the pandemic.
The VAPP applies to all internal revenue taxes covering:
Taxes which can be availed with VAPP are Income Tax (IT), Value Added Tax (VAT), Percentage Tax (PT), Excise Tax (ET), Documentary Stamp Tax (DST), Final Taxes (FT) and One-time Transactions (ONETT) taxes (donor’s tax, estate tax, capital gains tax, and documentary stamp tax).
Any natural or juridical person liable to pay for internal revenue taxes for the mentioned period, who unintentionally or erroneously paid the internal revenue tax liabilities or failed to file and pay tax returns.
The following taxpayers cannot avail the VAPP:
Requirements for VAPP Application
The following documents are required to be submitted to signify taxpayer’s intention to apply:
When and where to file?
Applications for VAPP are until December 31, 2020.
The documentary requirements stated above should be filed personally or through courier service with the Large Taxpayers (LT) Office or Revenue District Office (RDO) having jurisdiction over the taxpayer.
Instance of separate applications
There should be separate applications to be made for the following cases:
The BIR has thirty (30) days from date of receipt of requirements to complete the evaluation and review of the Application. The Revenue Officer shall endorse the same to the Assistant Chief of LT Office or to the Assistant Revenue District Officer for review. The Chief LT Officer and Chief Revenue District Officer shall be the approving official by signing the BIR Form No. 2119.
If there are deficiencies in the Application, BIR shall notify the taxpayer through the email address indicated on BIR Form No. 2119 to correct any errors/comply/pay the deficiencies within ten (10) working days from receipt of the email notification. Failure to comply within the 10-day period shall result in denial of the application.
Once approved, the taxpayer shall be issued a Certificate of Availment within 3 working days from date of approval. This Certificate will be the proof of entitlement of the privilege under this RR.
The taxpayer with issued Certificate of Availment shall not be audited for 2018 for the tax types covered by the availment. Upon VAPP application, all on-going BIR audit to the taxpayer shall be temporarily suspended and shall resume once the availment is rendered invalid. If valid, the issued Letter of Authority (LOA), Tax Verification Notice (TVN), Discrepancy Notice, etc. shall be withdrawn and cancelled.
How much to pay?
Taxes to be paid depends on the type of tax to be applied. Below is a schedule on the proper determination of taxes to be paid under VAPP:
5% of the total basic withholding tax remittance
Note: VAPP application shall constitute a waiver of claims for tax credit/refund unless taxpayer excludes in its availment the specific tax type for which it is intending to file a claim for tax credit/refund.
Basic tax due of the unfiled tax return or unpaid tax due plus 5%.
Seemingly, the BIR’s offer of “no tax audit” is enticing to the taxpayers since it can save up time, efforts, and stress in dealing with BIR audits. Taxpayers could focus more on the business operation. However, taxpayers should weigh the cost and benefit of taking the VAPP option.
The RR shall take effect 15 days following its publication in any newspaper of general information.
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