RR 21-20: Voluntary Assessment and Payment Program (VAPP)

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.


  1. Covered taxable years

The VAPP applies to all internal revenue taxes covering:

  • Taxable calendar year ending 2018; and,
  • Fiscal year 2018 ending July 31, 2018 to June 30, 2019.
  1. Covered Taxes

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).

  1. Who may avail?

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.

  1. Exceptions

The following taxpayers cannot avail the VAPP:

  1. Taxpayers already issued with Final Assessment Notice (FAN) that have been final and executory on or before the effectivity of the RR;
  2. Persons under investigation as a result of verified information filed by a tax informer with respect to deficiency taxes;
  3. Taxpayers with cases involving tax fraud; and,
  4. Taxpayer with pending tax evasion cases and other criminal offenses in the Tax Code.

Requirements for VAPP Application

The following documents are required to be submitted to signify taxpayer’s intention to apply:

  1. Duly accomplished Application Form (BIR Form No. 2119);
  2. Payment Form or BIR Form No. 0622, with proof of payment;
  3. Filed tax returns, proof of payment of taxes paid in 2017 and 2018 and Audited Financial Statements of the covered taxable year (for VAPP for IT, VAT, PT, ET and DST);
  4. Copies of remittance returns and proof of payment of final and creditable withholding taxes (for VAPP for Final Withholding Taxes on Compensation, Fringe Benefits, etc. and Creditable Withholding Taxes-non-ONETT);
  5. Copy of duly paid BIR Form 0605 and proof of payment for settlement of previous deficiency tax, with or without an assessment notice, if any; and,
  6. Duly accomplished ONETT tax returns and corresponding documentary requirements for the said transaction

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:

  • Taxpayer is registered in an RDO different from the RDO having jurisdiction over the place where the decedent is domiciled at the time of death, for estate tax;
  • Taxpayer is registered in an RDO different from the RDO having jurisdiction over the place where the donor is domiciled at the time of donation, for donor’s tax;
  • Taxpayer is registered in an RDO different from the RDO having jurisdiction over the place where the property is located, for taxes involving real properties;

The Process

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:

  • IT, VAT, PT, ET, and DST (non-ONETT)
Increase/Decrease in Total Taxes Due (2017 to 2018)Amount of Voluntary Tax Payment (Higher of)
Net increase of not more than 10%3% of 2018 gross sales 
7% of 2018 taxable net income
Net increase of more than 10% up to 30%2% of 2018 gross sales 
6% of 2018 taxable net income
Net increase of more than 30%1% of 2018 gross sales 
5% of 2018 taxable net income
Net decrease of not more than 10%4% of 2018 gross sales 
8% of 2018 taxable net income
Net decrease of more than 10%5% of 2018 gross sales 
9% of 2018 taxable net income

Minimum Amount

A. Individuals, estates and trusts – P75,000 
B. Corporations
a. With subscribed capital of more than P50 million – P1,000,000 
b. With subscribed capital of more than P20 million up to P 50 million
c. With subscribed capital of more than P5 million up to P20 million –
d. With subscribed capital of P5 million and less – P100,000 

Other juridical entities, including but not limited to cooperatives, foundations, general professional partnerships – P75,000
Note: In cases wherein there is a deficiency tax previously settled, the basic deficiency tax paid shall be added to the tax payments for the applicable taxable year to arrive at the correct voluntary tax payable.
  • Final Withholding Taxes on Compensation, Fringe Benefits, etc. and Creditable Withholding Taxes (non-ONETT) 

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.

  • ONETT Taxes (Estate Tax, Donor’s Tax, CGT, CWT/Expanded Withholding Tax, and DST)

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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