If you were not able to file your tax returns with the BIR, here are the rates for computing the penalties (surcharge, interest and compromise).The following penalties will be imposed upon filing, in addition to the tax due:
A. FOR LATE FILING OF TA RETURNS WITH TAX DUE TO BE PAID
A penalty equivalent to twenty-five percent (25%) of the amount due, in the following cases
- Failure to file any return and pay the tax due on the date prescribed
- Filing a return with an internal revenue officer other than those with whom the return is required to be filed;
- Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment; or
- Failure to pay the full or part of the amount of tax shown on any return required to be filed under the provisions of this Code or rules and regulations, or the full amount of tax due for which no return is required to be filed, on or before the date prescribed for its payment.
Surcharge is a one- time penalty applicable for each failure to pay the tax.
A surcharge equivalent to fifty percent (50%) of the amount due, in the following cases
- Willful neglect to file the return within the period prescribed by the Code or
by rules and regulations
- In case a false or fraudulent return is willfully made
A substantial under declaration of taxable sales, receipt or income or a substantial overstatement of deductions shall constitute prima facie evidence of false or fraudulent return. Failure to report sales, receipts and income in an exceeding thirty percent (30%) of that declared per return, and claim of deductions in an amount exceeding (30%) of actual deductions, shall render the taxpayer liable for substantial under declaration of sales, receipts, or income or for overstatement of deductions as mention herein.
In General. – There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent (20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment until the amount is fully paid. Interest is imposed on the following instances:
- Delinquency tax- failure to pay the amount of the tax due on any return required to be filed; or the amount of the tax due for which no return is required; or a deficiency tax or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Section (A) hereof until the amount is fully paid, which interest shall form part of the tax.
- Deficiency interest- based on any deficiency taxes during tax examination, which interest shall be assessed and collected from the date prescribe for its payment until the full payment thereof.
- Interest of extended payment on failure to pay the tax on installment or any part of the tax on instances where installment payment is allowed from the time required to be paid until fully paid .
- Failure to file and/or pay any internal revenue tax at the time or times required by law or regulation. Fine of not less than P 10,000 and imprisonment of not less than one (1) year but not more than 10 years.
Amount of Compromise:
If the amount of tax unpaid exceeds P 000 but does not exceed P 5,000 compromise is P 1,000
If the amount of tax unpaid exceeds P 5, 000 but does not exceed P 10,000 compromise is P 3,000
If the amount of tax unpaid exceeds P 10,000 but does not exceed P 20,000 compromise is P 5,000
If the amount of tax unpaid exceeds P 20,000 but does not exceed P 50,000 compromise is P 10,000
If the amount of tax unpaid exceeds P 50,000 but does not exceed P 100,000 compromise is P 15,000
If the amount of tax unpaid exceeds P 100,000 but does not exceed P 500,000 compromise is P 20,000
If the amount of tax unpaid exceeds P 500,000 but does not exceed P 1,000,000 compromise is P 30,000
If the amount of tax unpaid exceeds P 1,000,000 but does not exceed P 5,000,000 compromise is P 40,000
If the amount of tax unpaid exceeds P 5,000,000 compromise is P 50,000
B. FOR LATE FILING OF TAX RETURNS WITH NO TAX DUE TO BE PAID, the compromise penalty will be imposed upon filing of the Tax Return based on the following:
- Failure to make/file/submit any return or supply correct information at the time or time required by law or regulation.Fine of not less than P10,000 and imprisonment of not less than one (1) year but not more than ten (10) years.
Amount of Compromise:
If gross sales, earnings or receipts; or gross estate or gift (based on the subject returns/information for filing/submission)
Exceeds P 000 but does not exceed P 50,000 compromise is P 1,000
Exceeds P 50,000 but does not exceed P 100,000 compromise is P 3,000
Exceeds P 100,000 but does not exceed P 500,000 compromise is P 5,000
Exceeds P 500,000 but does not exceed P 5,000,000 compromise is P 10,000
Exceeds P 5,000,000 but does not exceed P 10,000,000 compromise is P 15,000
Exceeds P 10,000,000 but does not exceed P 25,000,000 compromise is P 20,000
Exceeds P 25,000,000 Compromise is P 25,000
- For Failure to File Certain Information Returns. – In the case of each failure to file an information return, statement or list, or keep any record, or supply any information required by this Code or by the Commissioner on the date prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall, upon notice and demand by the Commissioner, be paid by the person failing to file, keep or supply the same, One Thousand Pesos (P 1,000) for each failure: Provided, however, That the aggregate amount to be imposed for all such failures during a calendar year shall not exceed Twenty-Five Thousand Pesos (P 25,000).
C. FOR LATE FILING OF STATEMENTS/ REPORTS REQUIRED TO BE FILED WITH NO TAX DUE TO BE PAID, the compromise penalty will be imposed upon filing of the Tax Return based on the following:
- Violation of Other Provisions of this Code or Rules and Regulations in General.– Any person who violates any provision of this Code or any rule or regulation promulgated by the Department of Finance, for which no specific penalty is provided by law, shall, upon conviction for each act or omission, be punished by a fine of not more than One Thousand Pesos (P 1,000) or suffer imprisonment of not more than six (6) months, or both.
These are the penalties impose by the BIR in case of non compliance. We should be aware that these are costly to incur. And with the right information we should comply to avoid these unnecessary expenses.
Compliance is costly. Non compliance is luxury.