QuestionsQuestions (BIR REVENUE MEMORANDUM CIRCULAR NO. 46-99)
It is based on Section 248(A) of the National Internal Revenue Code (NIRC), as amended by R.A. No. 8424.
It is imposed when: (1) the taxpayer fails to file and pay on the due date, (2) files the return through an unauthorized internal revenue officer, (3) fails to pay the deficiency tax within the time prescribed in the notice of assessment, or (4) fails to pay the full or part of the tax shown on the return (or tax due where no return is required) on or before the prescribed payment date.
Because the 25% surcharge is intended to apply to specific delinquency situations on the tax due for payment dates—while deficiency taxes assessed are subject to interest (and possibly surcharge only under qualifying conditions) consistent with the Circular’s interpretation of Sections 248 and 249 as amended effective Jan. 1, 1998.
The Circular’s illustrations state that the imposition of the 25% surcharge is not duplicated for separate late acts; only one 25% surcharge is imposed in that combined situation, plus interest for the period of delinquency.
From the statutory due date of the tax (e.g., April 15, 1999) until the date of payment (e.g., June 30, 1999), using the Circular’s illustrative computation method.
It triggers the 25% surcharge under Section 248(A)(2), even if the return is filed and the tax is paid on time, because the filing was made through the wrong office/agent without authorization.
It reflects the higher surcharge applicable where there is willful neglect, as illustrated by the Circular (e.g., failure to file the return and resulting late payment due to willful neglect).
It applies 20% interest per annum on the deficiency tax from the original due date of the tax (e.g., April 15, 1998) until the date of assessment payment deadline shown in the notice (e.g., June 30, 1999), since the deficiency arose from incorrect computation discovered later.
Because after verification and failure to protest within the required time, the assessment resulted in a deficiency, and the Circular’s computation shows interest on the deficiency without adding the 25% surcharge for deficiency taxes—consistent with the Circular’s stated approach.
Because the Circular’s facts specify that the return was false or fraudulent and failed to report a taxable income; thus the higher surcharge (illustrated as 50%) applies for a fraudulent or false return, plus interest on the deficiency.
The Circular illustrates that there is a 25% surcharge for late payment of the assessment plus 20% interest per annum from the payment deadline until actual payment.
No 25% surcharge is imposed if the extension request was made on or before the original due date; however, 20% interest per annum is still imposed based on the unpaid amount, typically computed on a diminishing balance method as installments are paid.
The taxpayer is treated as already late in payment; therefore, the 25% surcharge is imposed even if payment is later allowed in partial amortization, while interest continues to apply consistent with the rules on delinquency.
No. The Circular states that if the taxpayer fails to pay the amount by the demanded deadline, no further 25% surcharge for late payment of the tax shall be imposed; only 20% interest will be imposed from the due date (as illustrated).
Section 204 provides that all criminal violations may be compromised except those already filed in court, or those involving fraud.
Because an extra-judicial compromise of criminal liability is consensual; the BIR may suggest settlement but cannot impose payment of a compromise penalty without the taxpayer’s agreement.
It is effective January 1, 1998, pursuant to Section 8 of R.A. No. 8424.