Missed the tax filing deadline? Here are the penalties

Missed the tax filing deadline? Here are the penalties
In general, late filers pay 25% of tax due, plus 20% interest per annum and a compromise penalty

MANILA, Philippines – Did you miss the income tax return (ITR) filing deadline on April 15? If yes, you will have to pay the price.

Republic Act 8424 or the Tax Reform Act of 1997 imposes penalties on late filers, as well as persons who commit tax-related offenses. (READ: Why do we pay taxes?)

In general, if you missed the April 15 deadline, you should pay 25% of the tax amount due plus 20% interest per annum (from the deadline until the amount is fully paid), on top of the tax you are required to pay.

The 25% surcharge is also imposed if you file your ITR with the wrong internal revenue officer.

But in case of “willful neglect to file the return” or in case “a false or fraudulent return is willfully made,” the penalty imposed is 50% of the tax due.

There is also a compromise penalty for unsettled obligations, in lieu of criminal prosecution, depending on the tax amount due, as mandated by Revenue Memorandum Order No. 19-2007 of the Bureau of Internal Revenue (BIR):

If amount of tax unpaid Compromise
exceeds but does not
P xxx P 500 P 200
P 500 P 1,000 P 400
P 1,000 P 2,000 P 700
P 2,000 P 5,000 P 1,000
P 5,000 P 7,500 P 1,500
P 7,500 P 10,000 P 2,000
P 10,000 P 15,000 P 3,000
P 15,000 P 20,000 P 4,000
P 20,000 P 30,000 P 6,000
P 30,000 P 50,000 P 8,500
P 50,000 P 100,000 P 12,000
P 100,000 P 500,000 P 16,000
P 500,000 P 1,000,000 P 20,000
P 1,000,000 P 5,000,000 P 25,000
P 5,000,000 xxxxxxx P 50,000

For example, if your tax amount due is P15,000 and you paid 30 days late, the total amount of penalties you need to pay, in addition to your tax, is P 7,000:

  • Surcharge: 15,000 x 25% = P 3,750
  • Interest: 15,000 x 20% x (30 days / 360 days) = P 250
  • Compromise penalty: P 3,000

Even if you do not have to pay any income tax, you still need to file a tax return with the BIR. (READ: What to consider in computing income tax)

This applies to people who have “exempt returns” (if the allowable tax deductions exceed the income) or “even returns” (if the tax withheld is equal to the income tax due), said Reymarie dela Cruz, head of the BIR tax information and education division.

If you are among those people and failed to file your ITR on April 15, here is a matrix of compromise penalties based on gross annual earnings, sales, or receipts:

If gross annual sales, earnings, or receipts;
or gross estate or gift
Compromise Penalty
exceeds but does not
P xxx P 10,000 P 200
P 10,000 P 20,000 P 400
P 20,000 P 30,000 P 600
P 30,000 P 50,000 P 1,000
P 50,000 P 75,000 P 1,500
P 75,000 P 100,000 P 2,000
P 100,000 P 300,000 P 3,000
P 300,000 P 500,000 P 5,000
P 500,000 P 1,000,000 P 7,500
P 1,000,000 P 5,000,000 P 10,000
P 5,000,000 P 10,000,000 P 15,000
P 10,000,000 P 25,000,000 P 20,000
P 25,000,000 xxxxxxxx P 25,000

If you attempt to evade tax payment altogether, you will be punished, upon conviction, with a fine ranging from P30,000 (around $675) to P100,000 (around $2,250), and imprisonment from 2 to 4 years. A civil suit for the collection of taxes may still be pursued by the BIR against you. – Rappler.com

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