QuestionsQuestions (BIR REVENUE REGULATIONS NO. 18-2013)
RR No. 18-2013 is promulgated pursuant to Section 244, in relation to Section 245, of the National Internal Revenue Code (NIRC) of 1997, as amended.
RR No. 18-2013 amends Section 3 of RR No. 12-99 by deleting the old provision on preparation of a Notice of Informal Conference (Section 3.1.1), and instead sets out a procedure starting with a Preliminary Assessment Notice (PAN).
If the taxpayer fails to respond within fifteen (15) days from receipt of the PAN, he is considered in default and the BIR shall issue a Formal Letter of Demand and Final Assessment Notice (FLD/FAN) calling for payment, including applicable penalties.
The BIR issues an FLD/FAN within fifteen (15) days from filing/submission of the taxpayer’s response, calling for payment of the deficiency tax(es) inclusive of applicable penalties.
The assessment shall be void.
The taxpayer may protest administratively within thirty (30) days from date of receipt of the FLD/FAN.
Request for reconsideration is reevaluation based on existing records without need of additional evidence (may involve questions of fact or law). Request for reinvestigation is reevaluation based on newly discovered or additional evidence the taxpayer intends to present (may involve questions of fact or law).
The taxpayer must state: (i) the nature of protest (reconsideration or reinvestigation, including newly discovered/additional evidence if reinvestigation), (ii) date of the assessment notice, and (iii) the applicable law/rules/jurisprudence basis; otherwise, the protest is considered void and without force and effect.
For reinvestigation, all relevant supporting documents must be submitted within sixty (60) days from filing of the letter of protest; otherwise, the assessment becomes final. The regulation clarifies that the phrase “assessment shall become final” means the taxpayer is barred from disputing by introducing newly discovered/additional evidence and the protest is denied.
A PAN shall not be required in enumerated cases under Section 228 of the Tax Code, such as: (i) mathematical error in computations on the face of the return; (ii) discrepancy between tax withheld and remitted by the withholding agent; (iii) carry-over/automatic application of excess creditable withholding tax claimed for a period; (iv) unpaid excise tax on excisable articles; and (v) sale/trade/transfer by an exempt person of locally purchased/imported articles to non-exempt persons.
In the cited exceptions, a FLD/FAN shall be issued outright.
The taxpayer may either (i) appeal to the Court of Tax Appeals (CTA) within thirty (30) days from receipt of the decision, or (ii) elevate the protest through a request for reconsideration to the Commissioner within thirty (30) days from receipt. The regulation states that no request for reinvestigation is allowed in administrative appeal.
If the protest (reconsideration: 180 days from filing; reinvestigation: 180 days from submission of required documents) is not acted upon within the 180-day period, the taxpayer may either file a petition for review with the CTA within 30 days after expiration of the 180 days, or await the final decision and appeal it within 30 days from receipt—these options are mutually exclusive.
The FDDA must state the facts and the applicable law/rules/jurisprudence, otherwise the decision shall be void, and must also indicate that it is the Commissioner’s final decision.
Service may be by: (i) personal service; (ii) substituted service (including leaving with clerk/person in charge, legal-age person in residence, or with barangay official after witnessing absence/refusal); or (iii) service by mail (registered mail or reputable courier; if undelivered, return after 10 days). Service to the tax agent/practitioner appointed by the taxpayer is deemed service to the taxpayer.
The taxpayer is liable for delinquency interest provided under Section 249(C)(3) of the NIRC, as amended, incident to late payment.