Tax Alert No. 2 - [UPDATE] Voluntary Assessment and Payment Program (VAPP)

Revenue Regulations 21-2020 for Voluntary Assessment and Payment Program (VAPP) was issued for the collection of additional tax revenues, which could otherwise be collected through audit and enforcement efforts.

Extension on period to avail

Revenue Regulations No. 33-2021 extended the period to avail the benefits of VAPP by qualified persons until June 30, 2021 unless further extended by the Secretary of Finance.

On the other hand, the rules in the application of privileges provided are as follows:

  • A taxpayer who holds a duly issued Certificate of Availment shall not be audited for 2018 for the tax types covered by the availment;
  • Those who avail of VAPP on withholding taxes shall be allowed to claim deduction on the corresponding income tax payment pursuant to Revenue Regulations No. 6-2018;
  • Upon availment of VAPP, there will be a suspension of any current audit being conducted on the taxpayer’s tax returns for the covered taxable period while said availment is under evaluation. Resumption of audit shall be made, once the availment is found invalid. If the availment is determined to be valid, a Certificate of Availment shall be issued while the Letter of Authority, Tax Verification Notice, Discrepancy Notice, Notice of Discrepancy, Preliminary Assessment Notice, Final Assessment Notice previously issued for pending cases shall be withdrawn and cancelled.
  • Despite the issuance of a Certificate of Availment, the taxpayer’s availment may still be rendered invalid and shall be subject to audit or investigation within the legally prescribed procedures and upon prior authorization and approval by the Commissioner of Internal Revenue, if either or both instances are present:
    1. A strong evidence or findings of underdeclaration of sales, receipts or income or overstatement of deductions by more than 30% based on a written report of the appropriate revenue official, stating the facts with supporting documents like Discrepancy Notice and other third party information (TPI) documents; and/or,
    2. A verifiable information that the taxpayer has withheld tax but failed to remit the same.
  • The denial of application or invalidation of a previously issued Certificate of Availment shall not be valid unless, the Division Chief (LT Office) or the Revenue District Officer where the taxpayer is registered, formally notifies the
    latter with statements of the reasons therefor. Said notice of denial or invalidation is appealable to the Assistant Commissioner-Large Taxpayer Service (ACIT-LTS) or Regional Director (RD), within thirty (30) days from receipt of such notice; and,
  • Any voluntary payment may be applied against the deficiency tax due, if any, that may be assessed against the taxpayer after the audit/ investigation.