1. What are the instances when FLD/FAN may be allowed to be issued outright in an
assessment?
There are 5 instances where PAN is not required; the deficiency tax is caused by
mathematical errors in the tax computation, there is a discrepancy between tax withheld
and the actual amount, the tax credit was automatically applied to the same amount
claimed against estimated tax liabilities, the excise tax due has not been paid, a local
purchase made by an exempt person has been sold or transferred to non-exempt
individuals.
2. What is the difference between deficiency interest and delinquency interest?
Upon the BIR investigation, deficiency interest is the amount still due and collectible from
the taxpayer while delinquency interest is the amount due indicated in the letter of
demand the taxpayer has failed to pay.
3. In addition to the deficiency basic tax, the BIR may impose these additional
penalties. What are these?
Aside from the unpaid deficiency tax, the BIR may also impose additional increments
such as surcharge, interest, and compromise penalty.
4. When may the taxpayer be imposed 50% surcharge?
If there is a willful neglect to file from the taxpayer,
5. What is the rate of interest that may be imposed by the BIR?
Double the prescribed rate for forbearance of money, which is currently 12% per annum.
6. What is compromise penalty?
A settlement for the government to not enforce criminal prosecution.
7. What is the prescriptive period in the collection of taxes?
Generally, after the final assessment is released to the taxpayer, the government has 5
years to make a collection. If there is no prior assessment, 10 years from the discovery
of fraud.
8. What are the ways in which the BIR may collect taxes?
The BIR can collect taxes through the seizure of taxpayer’s properties (Distraint/Levy) or
through Judicial Proceedings (filing of civil/criminal case)
9. What is the difference between abatement and compromise?
In compromise, the taxpayer still has to pay the deficiency tax depending on the
compromise settlement amount, while abatement automatically cancels the tax liability.
10. In case of overpayment or erroneous payment of tax (except VAT), what is the
prescriptive period to file a claim for tax refund?
If there is an overpayment from the tax return filed, it is not necessary to file a claim for
tax refund as it is already considered a claim for refund. However, if there is erroneous
payment of tax, the taxpayer should file a claim for refund within 2 years from the date of
tax payment.
11. In case of VAT, what are the instances when the taxpayer may file a claim for
refund?
The taxpayer may file a claim for refund if the sale of goods, properties, or services that
are zero-rated/effectively zero-rated, if registration was cancelled because of retirement
or cessation of business, or changes in or cessation of status under Sec. 106 (C) of the
Tax Code.
12. In case of VAT, what is the prescriptive period to file a claim for refund?
2 years from the date of filing of the quarterly VAT return.
13. What are the requisites for a valid claim for refund?
There are 3 requisites: a written claim for refund with the official approval of the
Commissioner, a refund claim must be submitted for a specific reimbursement demand,
the taxpayer must file the claim for refund within the 2-year prescriptive period.
14. What are the instances when a written claim for refund is not necessary?
If there is a tax return overpayment, there is no need to file a claim for a tax refund since
it is already considered a claim for a refund.
15. What is the irrevocability rule?
After the submission of the tax return, it becomes final and binding. In case there is an
overpayment of tax, the taxpayer’s option is either to carry over the excess creditable
withholding tax or file for a claim for refund.