The Bureau of Internal Revenue (BIR) has released a series of Revenue Regulations (RR) for the implementation of Republic Act No. 11976, otherwise known as the Ease of Paying Taxes Act (EOPT). This edition of Tax Notes discusses matters relating to the classification of taxpayers and the imposition of reduced interest and penalty rates for micro and small taxpayers covered under RR No. 8-2024 and RR No. 6-2024, respectively.
Classification of taxpayers
Taxpayers are classified as follows:
1. Micro Taxpayer – a taxpayer whose gross sales for a taxable year are less than P3 million.
2. Small Taxpayer – a taxpayer whose gross sales for a taxable year range from P3 million to less than P20 million.
3. Medium Taxpayer - a taxpayer whose gross sales for a taxable year range from P20 million to less than P1 billion.
4. Large Taxpayer - a taxpayer whose gross sales for a taxable year are P1 billion and above.
Gross sales cover gross sales revenue from the conduct of trade or exercise of profession, excluding any value-added tax component and other deductions, as applicable, during the taxable year.
Taxpayers registered in 2022 and prior years shall be classified based on gross sales for the taxable year 2022. On the other hand, taxpayers registered in 2022 and prior years but without any submitted information on their gross sales for taxable year 2022, and taxpayers registered in 2023 or 2024 before the effectivity of the regulations, shall be classified as micro, except VAT-registered taxpayers, who shall be classified as small.
Reduced interest and penalty rates
Taxpayers classified as micro and small will be granted lower penalties, namely:
1. 10% civil penalty for:
a. Failure to file any return and pay the tax due on the date prescribed. Provided that no penalty will be imposed on an amendment of a tax return if the covered taxpayer filed the initial tax return and paid the tax due on or before the prescribed due date for its filing.
b. Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment; or
c. Failure to pay the full or part of the amount of tax shown on any return required to be filed 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.
In case of willful neglect to file a return within the prescribed period, or for false or fraudulent filing of the return, a 50% penalty will be imposed.
2. Reduced interest to 50% of the interest rate mandated per Tax Code (e.g., 50% of 12% interest).
3. P500 penalty for failure to file an information return, statement or list that keep any record or supply any information as may be required on the date prescribed. Provided that the aggregate amount to be imposed for all such failures during a calendar year shall not exceed P12,500.
4. Reduced compromise penalty rate to 50% of the applicable rate or amount of compromise under Annex “A” of Revenue Memorandum Order No. 7-2015 and its subsequent amendments, if any.
Effectivity
The provisions stated in RR No. 6-2024 and RR No. 8-2024 are effective on April 27, 2024, or 15 days from April 12, 2024, which is the date of posting on the BIR website.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants
P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd
As published in SunStar Cebu, dated 19 May 2024
