Question & AnswerQ&A (BIR REGULATIONS NO. 6-2005)
The purpose of EO No. 399 and BIR Regulation No. 6-2005 is to establish the No Audit Program (NAP) to encourage taxpayers to voluntarily declare and pay higher taxes, thereby reducing administrative costs from audits and investigations and increasing tax collections.
The Base Year refers to the taxable year immediately prior to the current taxable year for which qualification under NAP is sought. For example, the Base Year for taxable year 2004 is 2003.
Taxpayers registered with the Bureau of Internal Revenue who have actually filed and paid income and business taxes for taxable year 2003 may participate in the NAP.
No. If a taxpayer fails to qualify for NAP in taxable year 2004, they cannot participate in the program for any of the remaining years (2005-2008).
Qualifying taxpayers are exempted from audit and/or investigation of their tax for that particular taxable year, except for Overseas Communication Tax and withholding taxes.
a) Income tax payment for the current taxable year must exceed that of the base year by at least 20%; b) Income tax payment for the last quarter of the current taxable year must exceed the last quarter of the base year by at least 25%; c) Ratio of income tax payment to gross sales/receipts for the current taxable year must be at least equal to that of the base year.
No. Taxpayers reporting net loss, those with Net Operating Loss Carryover, or those paying Minimum Corporate Income Tax are disqualified from participating in the NAP.
Yes. The Commissioner can audit taxpayers with outstanding undisputed letter notices, those who may have discrepancies based on information from third parties or themselves, and those who fail to file required tax returns or provide necessary information.
The application must be filed not later than 30 days from the statutory deadline for filing the first quarterly return for the succeeding year or 30 days from the effectivity of the regulations, whichever is later.