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Tax Remedies

Powers of the BIR


- Interpret tax laws
o Exhaustion of administrative remedies (decisions of Commissioner reviewable by
Secretary of Finance)
 CTA
 Regular courts (petition for certiorari under Rule 65 – constitutionality of tax
laws; declaratory relief – no alleged violation)

Assessment Cycle

1. Taxpayer files ITR and pay tax (self-assessment – taxpayer determines his tax liability and pays
the tax)
a. GR: pay as you file (not self-employed individual; receives income in installments but
not exceeding 25% of the total price)
b. EXC: See Sec. 56, NIRC
c. Prescriptive periods to be counted from
i. Income tax – annual ITR
ii. VAT – quarterly
iii. Withholding tax – monthly
2. Commissioner issues Letter of Authority (BIR)
3. Audit – within 120 days from date of issuance and service of the Letter of Authority (BIR)
4. Notice of Informal Conference (BIR) – X (per RR 18-13 dated Nov. 28, 2013)
5. Preliminary Assessment Notice or PAN (BIR)
6. Reply to PAN (Taxpayer) – 15 days from receipt of PAN
7. Final Assessment Notice or FAN / Demand Letter (BIR)
8. Protest (Taxpayer) – within 30 days from receipt of FAN
9. Supplemental Protest (Taxpayer) – within 60 days….
10. Action / Inaction (BIR)

Assessment v. Collection
- Assessment: within 3 years from date of filing return, except in cases of fraud (10 years)
- Collection: within 5 years from date of assessment, except in cases of fraud (10 years)

Final decision on the disputed assessment (FDDA) – issued by Commissioner; appealable to CTA

PAN – reply
FAN – protest (within a non-extendible period of 30 days)

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