4.

Other percentage taxes;

Republic Act No. 11976 5. Excise taxes;
6. Documentary stamp taxes; and
Section 1. Title. 7. Such other taxes as are or hereafter may be imposed and collected
This Act shall be known as the “Ease of Paying Taxes Act.” by the BIR.

Section 2. Declaration of Policy. Classification of Taxpayers

It is hereby declared the policy of the State: GROUP GROSS SALES

1. To provide a healthy environment for the tax paying public that Micro Less than ₱3 million
protects and safeguards taxpayer rights and welfare;
Small ₱3 million to less than ₱20 million
2. To modernize tax administration and improve its efficiency and
effectiveness by providing mechanisms that encourage proper and Medium ₱20 million to less than ₱1 billion
easy compliance at the least cost and resources possible; Large ₱1 billion and above
3. To update the taxation system, adopt best practices, and replace
antiquated procedures; and
4. To enact policies and procedures which are appropriate to different
types of taxpayers.
Section 4. Definitions.
Amended Sec. 22 of the NIRC.
Section 3. Sources of Revenue and 1. Filing of Return — The act of accomplishing and submitting the
Classification of Taxpayers. prescribed tax return, electronically or manually, to the BIR or
Amended Section 21 of the NIRC of 1997. through any authorized agent or authorized tax software provider, as
required under the NIRC or as prescribed under existing rules and
Sources of Revenue regulations.
1. Income tax; 2. Payment of Tax/Remittance of Tax — The act of delivering the
2. Estate and donor’s taxes; amount of tax
3. Value-added tax;
 Section 5. Section 7. Payment and Assessment of
Repeals Sec. 34(K) of the NIRC. Income Tax for Individuals and
Corporations
Section 6. Individual Returns.
Amends Sec. 56 of the NIRC.
Amends Sec. 51 of the NIRC
 Tax must be paid by the person subject to it when filing a return,
A. Requirements either electronically or manually.
The following individuals shall not be required to file an ITR:  Tramp vessels, shipping agents, husbanding agents, and captains of
tramp vessels must file a return and pay the tax before departure.
1. An individual citizen of the Philippines who is working and
Failure to file the return and pay the tax can result in the Bureau of
deriving income solely from abroad as an Overseas Contract
Customs holding the vessel until proof of payment or a sufficient
Worker or OFW.
bond is provided.
B. Where to File
Section 8. Withholding of Tax at Source.
Except in cases where the Commissioner otherwise permits, the return shall
Amends Sec. 57 of NIRC
be filed with any authorized agent back, RDO through Revenue Collection
Officer, or authorized tax software provider.
Tax-Free Covenant Bonds
D. Husband and Wife  Department of Finance reviews creditable tax withholding
Married individuals must file a tax return for the taxable year. They can file regulations every three years.
jointly, combining both spouses’ income, either electronically or manually.  Can direct the BIR to amend rules if adverse impact on taxpayers is
found.
In cases where it's impractical for spouses to file jointly, they can file separate  Micro taxpayers exempt from withholding taxes.
returns. The BIR will consolidate separate returns for verification purposes.
 
Section 9. Returns and Payment of Taxes Creditable income tax deducted and withheld in a previous period
can still be credited in subsequent years if declared in the tax return.
Withheld at Source.  Withheld taxes are considered trust funds, to be kept separate from
Amends Sec. 58 of NIRC. other funds of the withholding agent.

Quarterly Returns and Payments of Taxes Withheld Section 10. Final Adjustment Return
 Taxes deducted and withheld by withholding agents. Amends Sec. 76 of NIRC.
 Covered by a return and paid electronically or manually.
 Corporation can carry over excess income taxes paid.
 Exceptions permitted by the Commissioner.
 Can be credited against estimated quarterly income tax liabilities in
 Payment through authorized agent bank, RDO, or tax software
succeeding years.
provider.
 Once the option to carry over is made, it's irrevocable for that
Timing of Withholding Taxes period.
 No cash refund or tax credit certificate allowed after choosing carry
The obligation to deduct and withhold the tax arises at the time the income
over.
has become payable.
 If unable to carry over due to dissolution or cessation of business,
Income of Recipient apply for refund.
 Bureau of Internal Revenue decides on refund within two years of
 Income subject to withholding tax must be included in the
dissolution or cessation of business.
recipient’s tax return.
 Excess tax withheld will be refunded to the recipient according to Section 11. Place and Time of Filing and
Section 24.
 If tax collected at source is less than tax due, the difference is to be
Payment of Quarterly Corporate Income
paid following Section 56. Tax
 Claims for tax credit or refund require proof of income declaration Amends Sec. 77 of the NIRC.
and withholding.
 A. Place of Filing Section 12. Filing of Return and Payment of
 Quarterly income tax declaration and final adjustment return filing Taxes Withheld
options:
Amends Sec. 81 of the NIRC.
o Electronically or manually.
 Filing locations:  Taxes deducted and withheld by employers on employee wages
o Authorized agent bank must be covered by a return and paid to authorized agents.
o RDO through Revenue Collection Officer  Returns and payments can be made electronically or manually.
o Authorized tax software provider  Deadline for filing returns and making payments is within 25 days
 Commissioner’s permission may be required for exceptions. after each calendar quarter.
 Commissioner may require more frequent payments with approval
B. Time of Filing the Income Tax Return from the Secretary of Finance to protect the government’s interests.
 Taxes withheld by employers are held in a special fund in trust for
 Quarterly declaration due within 60 days after each of the first three
the government until paid to collecting officers.
quarters of the taxable year.
 Can be filed electronically or manually.
Section 13. Estate Tax Returns
 Final adjustment return due on or before the 15th day of the fourth
month after the fiscal year’s end. Amends Sec. 90 of the NIRC.

C. Time of Payment of the Income Tax Place of Filing

 Income tax due on corporate quarterly returns and final adjustment  Return filing required.
income tax returns must be paid at the time of filing.  Filing methods: electronic or manual.
 Payment can be made electronically or manually.  Filing locations: authorized agent bank, RDO through Revenue
 The payment method must comply with the Commissioner’s Collection Officer, or authorized tax software provider.
prescribed manner.  Commissioner’s discretion for exceptions.
 Section 14. Payment of Tax Section 16. Value-Added Tax on Sale of
Amends Sec. 91 of the NIRC Goods or Properties
Amends Sec. 106 of NIRC
Time of Payment
The estate tax shall be paid, either electronically or manually, at the time the Rate and Base of Tax
return is filed by the executor, administrator, or the heirs.
 A 12% value-added tax is imposed on every sale, barter, or
exchange of goods and properties. The tax is to be paid by the seller
Liability for Payment
or transferor.
 Estate tax must be paid by the executor or administrator.  “Gross sales” refers to the total amount paid by the purchaser to the
 Payment can be done electronically or manually. seller, excluding the value-added tax. Excise tax, if applicable, is
 Beneficiaries are liable to pay a portion of the estate tax. Their included in the gross sale.
liability is based on the proportion of their distributive share to the
total net estate value. Sales Returns, Allowances, and Sales Discounts
 Value of goods/properties sold and returned or for which allowances
Section 15. Filing of Return and Payment of granted can be deducted from gross sales in the same quarter as
Tax refund/credit issued.
Amends Sec. 103 of the NIRC  Sales discount shown on invoice at the time of sale, not dependent
on future events, can be excluded from gross sales within the same
 Donor return must be filed within 30 days of the gift. quarter.
 Tax payment should accompany the return.
 Filing can be done electronically or manually. Authority of the Commissioner to Determine the
 Options for filing include authorized agent bank, RDO through Appropriate Tax Base
Revenue Collection Officer, or authorized tax software provider.  Commissioner establishes tax base rules and regulations.
 Commissioner may permit exceptions in certain cases.  Applies to transactions classified as sales, barter, or property
exchanges.
  Addresses cases where gross sale is significantly below market  Sales discounts on invoices at the time of sale, not dependent on
value. future events, can be excluded from gross sales in the same quarter
 Rules are set by the Secretary of Finance. if granted.

Section 17. Value-Added Tax on Sale of Section 18. Exempt Transactions

Services or Lease of Properties Amends Sec. 109 of NIRC

Amends Sec. 108 of NIRC The following transactions shall be exempt from VAT:

Rate and Base of Tax 1. Sale or lease of goods or properties or the performance of services
other than the transactions mentioned in the preceding paragraphs,
 VAT of 12% imposed on gross sales from services and property
the gross annual sales do not exceed the amount of ₱3 million;
transactions.
Provided, That the amount herein stated shall be adjusted to its
 Gross sales defined as the total money or equivalent received for present values using the consumer price index, as published by the
services, rentals, or royalties. Philippine Statistics Authority every three years.
o Includes materials supplied with services during taxable
quarter. Section 19. Tax Credits
o Excludes VAT and amounts for third-party payment or
Amends Sec. 110 of the NIRC.
reimbursement.
o Long-term contracts require invoices in the month of Creditable Input Tax
service or property supply.
Any input tax evidenced by a VAT invoice issued in accordance with Section
Sales Allowances and Sales Discounts 113 on the following transactions shall be creditable against the output tax:

 Services rendered with allowances granted by a VAT-registered 1. Purchase or importation of goods;

person can be deducted from gross sales in the same quarter as the a. For sale;
refund or credit memorandum. b. For conversion into or intended to form part of a finished
product for sale, including packaging materials;
c. For use as supplies in the course of business;
 d. For use as materials supplied in the sale of service; or Period Within Which the Refund of Input Taxes Shall
e. For use in trade or business.
be Made
2. Purchase of services on which a VAT has accrued.
 Commissioner grants refunds for creditable input taxes within 90
Output VAT Credit on Uncollected Receivables days of application submission.
 Seller can deduct output VAT on uncollected receivables in the next  VAT refund claims categorized as low-, medium-, and high-risk
quarter after agreed payment period. based on factors like refund amount and tax compliance history.
 Seller must have fully paid VAT on the transaction.  Medium- and high-risk claims subject to audit or verification per
 VAT on uncollected receivables must not have been claimed as Bureau of Internal Revenue's program.
allowable deduction.  If refund is denied, Commissioner must provide written legal and
 If uncollected receivables are recovered, their output VAT is added factual basis within 90 days.
to the taxpayer’s output VAT during the recovery period.  Taxpayer can appeal denial within 30 days or after 90-day period to
Court of Tax Appeals.
Section 20. Refunds of Input Tax  Failure by BIR to act within 90 days is punishable under Section
269.
Amends Sec. 112 of NIRC.

Cancellation of VAT Registration Manner of Giving Refund

 Refunds made through warrants drawn by the Commissioner or
 Registration cancellation due to retirement, business cessation, or
authorized representative.
status changes.
 No need for countersignature by the Chairperson, COA.
 Within two years from cancellation, eligible for:
 Administrative Code of 1987 exceptions don’t apply.
o Tax credit certificate issuance.
 Refunds subject to post audit by COA based on risk classification.
o Cash refund for unused input tax.
 If disallowed, taxpayer solely liable for disallowed amount.
 Purpose: payment of other internal revenue taxes or apply for
 Possible administrative liability for BIR employee found grossly
refund.
negligent.
 and zero-rated components, and the calculation of the
Section 21. Invoicing and Accounting VAT on each portion of the sale shall be shown on the
Requirements for VAT-Registered Persons invoice. The seller may issue separate invoices for the
Amends Sec. 113 of NIRC taxable, exempt, and zero-rated components of the sale.
3. In the case of sales in the amount of ₱1,000 or more where the sale
Invoicing Requirement or transfer is made to a VAT-registered person, the name, address,
A VAT-registered person shall issue a VAT invoice for every sale, barter, and TIN of the purchaser, customer, or client.
exchange, or lease of goods and properties, and for every sale, barter, or
exchange of services.
Consequences of Issuing an Erroneous VAT Invoice
1. If a person who is not a VAT-registered person issues an invoice
Information Contained in the VAT Invoice showing the person’s TIN, followed by the word “VAT”:
The following information shall be indicated in the VAT invoice: a. The issuer shall, in addition to any liability to other
percentage taxes, be liable to:
1. A statement that the seller is a VAT-registered person, followed by i. The tax imposed in Section 106 or 108 without
the seller’s Taxpayer Identification Number. the benefit of any input tax credit; and
2. The total amount which the purchaser pays or is obligated to pay to ii. A 50% surcharge under Section 248(B).
the seller with the indication that such amount includes the VAT. b. The VAT shall, if the other requisite information required
a. The amount of the tax shall be shown as a separate item in under Subsection (B) is shown on the invoice, be
the invoice. recognized as an input tax credit under Section 110.
b. If the sale is exempt from VAT, the term “VAT-exempt” 2. If a VAT-registered person issues a VAT invoice for a VAT-exempt
sale shall be written or printed on the invoice. transaction but fails to display on the invoice the term “VAT-
c. If the sale is subject to 0% VAT, the term “zero-rated sale” exempt” sale, or clearly provide a breakdown of the VAT-exempt
shall be written or printed on the invoice. sale, the issuer shall be liable to account for the tax imposed in
d. If the sale involves goods, properties, or services, some of Section 106 or 108 as if Section 109 did not apply.
which are subject to and some of which are VAT zero- 3. If a VAT-registered person issues a VAT invoice to another VAT-
rated or VAT-exempt, the invoice shall clearly indicate the registered person with lacking information required under
breakdown of the sale price between its taxable, exempt, Subsection (B), the issuer shall be liable for noncompliance with the
 invoicing requirement. However, the VAT shall still be allowed to
be used as input tax credit on the part of the purchaser pursuant to
Section 23. Power of the Commissioner to
Section 110 if the lacking information do not pertain to the amount Suspend the Business Operations of a
of sales, amount of VAT, name, and TIN of both the purchaser and Taxpayer
issuer/seller, description of goods or nature of services, and the date
Amends Sec. 115
of the transaction.
The Commissioner or his authorized representative is empowered to suspend
Section 22. Return and Payment of Value- the business operations and temporarily close the business establishments of
Added Tax any person for any of the following violations:

Amends Sec. 114 In case of a VAT-registered person:

1. Failure to issue invoices;

In General
2. Failure to file a VAT return as required under Sec. 114; or
 VAT must be paid by VAT-registered individuals. 3. Understatement of taxable sales by 30% or more of his correct
 Quarterly returns of gross sales must be filed within 25 days after taxable sales for the taxable quarter.
the end of each taxable quarter.
 VAT payments for VAT-registered individuals must be made Section 24. Tax on Persons Exempt from
monthly. Value-Added Tax
 Starting January 1, 2023, filing and payment deadlines will align,
Amends Sec. 116
occurring within 25 days after each taxable quarter.
 Exemption under Section 109(CC) from VAT for certain sales.
Where to File the Return and Pay the Tax  Non-VAT-registered individuals pay 3% tax on gross quarterly
Except as the Commissioner otherwise permits, the return shall be filed with sales.
and the tax paid, either electronically or manually, to any authorized agent  Cooperatives are exempt from the 3% tax.
bank, RDO through RCO, or authorized tax software provider.  Reduced rate of 1% applicable from July 1, 2020, to June 30, 2023.
 Section 25. Percentage Tax on Domestic Section 28. Tax on Overseas Dispatch,
Carriers and Keepers of Garages Message or Conversation from the
Amends Sec. 117 Philippines
 Tax of 3% on quarterly gross sales for rental cars, transportation Persons Liable
contractors, and domestic carriers by land.
 10% tax on overseas dispatch, messages, or conversations
 Exclusion of gross sales from incoming and outgoing freight of
transmitted from the Philippines via communication services.
common carriers from local taxes under RA 7160.
 Tax payable by the service recipient to the service provider, to be

Section 26. Percentage Tax on International collected and paid within 20 days after each quarter.

Carriers Exemptions
Amends Sec. 118 The tax imposed by this section shall not apply to:

 3% tax on quarterly gross sales for international air carriers 1. Government — Amounts billed for messages transmitted by the
transporting cargo out of the Philippines. Government of the Republic of the Philippines or any of its political
 3% tax on quarterly gross sales for international shipping carriers subdivisions or instrumentalities.
transporting cargo out of the Philippines. 2. Diplomatic Services — Amounts billed for messages transmitted
by any embassy and consular offices of a foreign government.
Section 27. Tax on Franchise 3. International Organizations — Amounts billed for messages
transmitted by a public international organization or any of its
Amends Sec. 119
agencies based in the Philippines enjoying privileges, exemptions,
 3% tax on gross sales for radio and/or television broadcasting and immunities which the Government of the Philippines is
companies with annual sales below ₱10 million. committed to recognize pursuant to an international agreement.
 2% tax on gross sales for gas and water utilities with franchises. 4. News Services — Amounts billed for messages from any
 Option for broadcasting companies to register as value-added newspaper, press association, radio or television newspaper,
taxpayers with irrevocable choice. broadcasting agency, or newstickers services, to any other
 newspaper, press association, radio or television newspaper Where to File
broadcasting agency, or newsticker service to a bona fide
correspondent, which messages deal exclusively with the collection  Mandatory filing of consolidated return for all branches or places of
of news items for, or the dissemination of news items through, business.
public press, radio or television broadcasting or a newsticker service  Filing options: electronically or manually.
furnishing a general news service similar to that of the public press.  Submission to authorized agent bank, Revenue District Office, or
authorized tax software provider.
Section 29. Returns and Payment of
Percentage Taxes Section 30. Payment of Documentary Stamp
Amends Sec. 128
Tax
Amends Sec. 200
Returns of Gross Sales or Earnings and Payment of
Tax In General
 Requirement to file tax return and pay documentary stamp tax.
Persons Liable to Pay Percentage Taxes
 Filing options: electronically or manually.
 Quarterly filing required for those subject to percentage taxes.  Rules and regulations to be prescribed by Secretary of Finance upon
 Payment due within 25 days after each taxable year. recommendation of the Commissioner.
 Tax accrues from the date of VAT registration cancellation for those
liable under Section 116. Time for Filing and Payment of the Tax
Person Retiring from Business  Tax return filing within 10 days after the month of taxable
document activity.
 Notification required for retirement from a business subject to
 Filing options: electronically or manually.
percentage tax.
 Tax payment due concurrently with filing of the return.
 Filing of return and payment of tax due within 20 days after closing
the business.
 Where to File Section 32. Recovery of Tax Erroneously or
 Requirement to file tax return and pay tax through authorized Illegally Collected
channels.
 Requirement to file claim for refund or credit with Commissioner
 Filing options: electronically or manually.
before pursuing court action.
 Payment through authorized agent bank, Revenue District Office, or
 Suit or proceeding may proceed regardless of payment under protest
authorized tax software provider.
or duress.

Section 31. Authority of the Commissioner Suit or proceeding may be filed upon full or partial denial of claim
or failure of Commissioner to act within 180-day period.
to Compromise, Abate, and Refund or Credit  Commissioner may refund or credit tax without written claim if
Taxes clearly erroneously paid.
Amends Sec. 204  Taxpayer may appeal denial of refund claim or inaction by
Commissioner to Court of Tax Appeals within 30 days.
 Commissioner’s authority to credit or refund taxes and penalties.
 Conditions for tax credit or refund: written claim within two years Section 33. Preservation of Books of
of payment. Accounts and Other Accounting Records
 Processing time for refunds: 180 days from submission of complete
Amends Sec. 235
documents.
 Denial of refund must be justified.  Requirement to preserve books of accounts and accounting records
 Failure to process refund within 180 days punishable. for five years.
 Tax Credit Certificate applicable against internal revenue tax.  Preservation period starts from the day following the return filing
 Conversion of unutilized tax credits into refund allowed under deadline or from the filing date if late.
Section 230.  Books and records subject to examination and inspection by internal
 Surrender of Tax Credit Certificate for verification and cancellation. revenue officers.
 No tax refund for incentives without actual payment.  Income tax examination and inspection limited to once per taxable
year.
 
Section 34. Registration Requirements Application for registration update required, electronically or
manually.
Amends Sec. 236  Audit investigation continues if initiated before transfer, conducted
by initiating Revenue District Office.
Requirements
Every person subject to any internal revenue tax shall register once, either Cancellation of Registration
electronically or manually, with the appropriate RDO:
General Rule
1. Within 10 days from date of employment.  Registration cancellation by filing update application with RDO.
2. On or before the commencement of business.
 Commissioner retains authority for tax liability audit despite
3. Before payment of any tax due.
cancellation.
4. Upon filing of a return, statement, or declaration as required in this
 Application can be filed electronically or manually.
Code.

Taxpayers must register with name, residence, business details, as per

Cancellation of Value-Added Tax Registration
Commissioner’s requirements. Registration accessible to all, including non- A VAT-registered person may cancel the registration for VAT if:
residents. Simplification of registration and tax compliance for self-
1. The person makes a written or an electronic application and can
employed/professionals ensured.
demonstrate to the Commissioner’s satisfaction that the gross sales
for the following 12 months, other than those that are exempt under
Registration for Each Type of Internal Revenue Tax
Section 109(A) to (CC), will not exceed the threshold as provided in
 Requirement to register with Bureau of Internal Revenue for each Section 109(CC).
applicable internal revenue tax. 2. The person has ceased to carry on the trade or business and does not
 Obligation to file returns and pay taxes, electronically or manually. expect to recommence and trade or business within the next 12
 Mandatory updates for any changes to registration. months.

Transfer of Registration The cancellation of registration will be effective from the first day of the
following month.
 Duty to update registration when transferring business location.
 Persons Required to Register for Value-Added Tax o Once registered, cancellation isn't allowed for the
following three years.
Any person who, in the course of trade or business, sells, barters, or
 Designation and Identification:
exchanges goods or properties or engages in the sale or exchange of services,
o Registrants are termed “VAT-registered persons.”
shall be liable to register, either electronically or manually, for value-added
o Each registrant is given a single TIN.
tax if:

1. The person’s gross sales for the past 12 months, other than those Supplying of Taxpayer Identification Number
that are exempt under Section 109(A) to (CC), have exceeded the  TIN Assignment:
threshold as provided in Section 109(CC). o Those required by the tax code to file documents must
2. There are reasonable grounds to believe that the gross sales for the
have a TIN.
next 12 months, other than those that are exempt under Section
o TIN must be indicated in all filed returns, statements, or
109(A) to (CC), will exceed the threshold as provided in Section
documents.
109(CC).
o Filing can be done electronically or manually with the
Individuals must register with the appropriate RDO when liable. Failure BIR.
results in tax liability as if VAT-registered, without input tax credits for  Dealing with Registered Taxpayer’s Death:
unregistered period. Registration options: electronic or manual. o Upon death of a registered taxpayer, the administrator or
executor must register the estate.
Optional Registration for Value-Added Tax of Exempt o New TIN is provided for the estate.
Person  Nonresident Decedent’s Estate Registration:
 Eligibility to Register for Value-Added Tax: o Executor or administrator registers the estate where they
o Any non-mandatory VAT registrant can choose to register. are registered.
o Registration can be done electronically or manually. o If not registered, registration is done where they legally
o Registration is to be done with the RDO overseeing the reside, using the TIN from that jurisdiction.
person’s head office.
 Registration Election Consequences:
 
Section 35. Issuance of Sales or Commercial Additional information may be required by the Secretary of
Finance, recommended by the Commissioner.
Invoices
All persons who print sales or commercial invoices shall maintain a
Amends Sec. 237
logbook/register of taxpayers who availed of their printing services. The
 Internal revenue tax subjects must issue registered sale/commercial logbook/register shall contain the following information:
invoices for transactions valued at ₱500 or more. 1. Names, TINs of the persons or entities for whom the sales or
 Invoices must include: name, TIN, date, quantity, unit cost, and commercial invoices were printed.
description of merchandise/services. 2. Number of booklets, number of sets per booklet, number of copies
 Values should be adjusted every three years using the consumer per set, and the serial numbers of the invoices in each booklet.
price index.
 Sellers must issue invoices upon buyer request, regardless of Section 37. Exhibition of Certificate of
transaction amount.
Payment at Place of Business
 If sales exceed threshold, one invoice for total sales at the end of the
day should be issued. Amends Sec. 241
 Aggregate sales amount at the end of the day must be at least ₱500.  Tax payment certificates/receipts for businesses must be
 VAT-registered individuals must issue registered sale/commercial prominently displayed at the business location.
invoices regardless of transaction amount.  Peddlers or those without a fixed business location must keep the
certificates in their possession. They must be produced upon
Section 36. Printing of Sales or Commercial demand by any internal revenue officer.
Invoices
Amends Sec. 238
Section 38. Continuation of Business of
Deceased Person
Businesses must obtain authorization from the BIR before printing
sales/commercial invoices. Amends Sec. 242
 Invoices must be serially numbered and include: name, TIN, and
business address.
  No extra payment is needed for the remaining term of a tax if a conditions under which evidence of payment shall be furnished the
registered business owner dies and the business continues under the taxpayer, and the preparation and publication of tax statistics, and
estate. publication of information required to be published pursuant to any
 Within 30 days of the owner’s death, the interested party must law, rules, and regulations. For purposes of publication, the BIR
submit inventories of goods or stocks to the BIR. This requirement may make use of any electronic means of publication in the Official
also applies to ownership transfers or name changes of the business. Gazette or its official website.
2. The manner in which internal revenue taxes, such as income tax,
Section 39. Removal of Business to Other including withholding tax, estate and donor’s taxes, value-added
Location tax, other percentage taxes, excise taxes and documentary stamp
taxes shall be paid, either electronically or manually, through the
Amends Sec. 243 collection officers of the BIR or through duly authorized agent
 Registered businesses can relocate to another location without banks which are hereby deputized to receive such payments of taxes
paying additional tax. and the returns, papers and statements that may be filed by the
 Relocation must adhere to rules set by the Secretary of Finance, taxpayers in connection with the payment of the tax. The
recommended by the Commissioner. Commissioner has authority to mandate large taxpayers file returns
 No extra tax is required for the remaining term of the original and pay taxes through designated banks, RDOs, or authorized tax
payment. software providers. This power extends within six years from
Republic Act No. 7646 approval or completion of its
Section 40. Specific Provisions to be computerization program. Separate venues may be assigned for
Luzon, Visayas, and Mindanao taxpayers.
Contained in Rules and Regulations
Amends Sec. 245 Section 41. Civil Penalties
The rules and regulations of the BIR shall, among other things, contain Amends Sec. 248
provisions specifying, prescribing, or defining: There shall be imposed, in addition to the tax required to be paid, a penalty
1. The manner in which tax returns, information, and reports shall be equivalent to 25% of the amount due in the following cases:
prepared and reported, and the tax collected and paid, as well as the 1. Failure to file any return and pay the tax due thereon.
 2. Failure to pay the deficiency tax within the time prescribed for its 1. Adopt an integrated and automated system for accepting and
payment in the notice of assessment. facilitating basic tax services such as registration, TIN issuance and
3. Failure to pay the full or part of the amount of tax shown on any validation, filing of returns, submission of supporting documents
return required to be filed, or the full amount of tax due for which such as attachments, and payment of taxes, fines, surcharges, and
no return is required to be filed, on or before the date prescribed for penalties.
its payment. 2. Immediately take measures to set up electronic and online systems
that will make the means of exchanging data and information
Section 42. Violations Committed by between offices, departments, authorized agent banks, and other
Government Enforcement Officers pertinent units secure, efficient, and seamless.
3. Streamline procedures by adopting automation and digitalization of
Amends Sec. 269(j)
BIR services to minimize face-to-face transactions and to facilitate
Every official, agent, or employee of the Bureau of Internal Revenue or any efficient delivery of services to taxpayers.
other agency of the Government charged with the enforcement of the 4. Build up its technology capabilities, including the creation of data
provisions of this Code, who is guilty of any of the offenses herein below centers, data depositories, basic messaging and electronic mail
specified shall, upon conviction for each act or omission, be punished by a facilities, encryption systems, and cyber-security systems.
fine of not less than ₱50,000 but not more than ₱100,000 and suffer
imprisonment of not less than 10 years but not more than 15 years and shall Section 44. Ease of Paying Taxes and
likewise suffer an additional penalty of perpetual disqualification to hold Digitalization Roadmap
public office, to vote, and to participate in any public election:
 BIR to develop Ease of Paying Taxes (EOPT) and digitalization
(j) Deliberate failure to act on the application for refunds within the roadmap.
prescribed period provided under Sec. 112 and Sec. 204.  Focus on programs: simplified tax returns, streamlined processes,
reduced requirements, and digitalization of services.
Section 43. Digitalization of Bureau of  Priority for micro and small taxpayers in streamlining procedures
Internal Revenue and requirements.
BIR plans digitalization strategy for better service, offering automated  Aim to improve tax compliance and enhance taxpayer convenience.
solutions to benefit taxpayers’ efficiency. For this purpose, the BIR shall:
  Annual report submission to Congressional Oversight Committee
on Comprehensive Tax Reform Program (COCCTRP).

Section 45. Special Concessions for Certain

Taxpayers
The following concessions shall be made available to micro and small
taxpayers for the purposes of this Act:

1. The Income Tax Return (ITR) required under Section 51 of the

NIRC shall consist of a maximum of two pages in paper form or
electronic form.
2. A reduced rate of 10% for civil penalties as provided under Sec. 248
of the NIRC, as amended.
3. A reduced fine of ₱500 as penalty for failure to fine certain
information returns as provided under Sec. 250.
4. A reduced compromise penalty rate of at least 50% for violations of
Secs. 113, 237, and 238.