BIR Offers One-Time Tax Abatement for Micro Taxpayers Until December 2026

If your business has unsettled BIR obligations from prior years and your gross sales are below P3 million annually, there is now a formal window to resolve them. Revenue Regulations No. 4-2026, signed on June 18, 2026, gives qualifying micro taxpayers a one-time opportunity to clear delinquent accounts, disputed assessments, and stop-filer cases (with taxes and penalties abated) before December 31, 2026.

But this is not a general tax abatement. It has a defined scope, a hard deadline, and a specific process. Here is what it covers and what you need to do.

Who Qualifies for the BIR Tax Abatement Under RR No. 4-2026

The abatement is available to micro taxpayers, defined under RR No. 8-2024 as businesses with gross sales below P3,000,000 for the year. For mixed income earners, only business income counts toward this threshold; compensation income from employment is excluded.

Your total basic tax liabilities and/or penalties across all covered cases for a taxable year must not exceed P80,000. That ceiling covers the combined exposure across all tax types for that year.

What It Covers

The regulation applies to three broad situations, all as of December 31, 2025:

• Delinquent accounts — unpaid taxes due on or before December 31, 2025, whether self-assessed or arising from a final deficiency assessment
• Assessments — whether preliminary or final, disputed or not, issued on or before December 31, 2025, including those still being contested at the RDO, courts, or the Court of Tax Appeals
• Stop-filer cases — where required returns or tax information were not filed by the due date, including businesses that have already ceased operations

Beyond these three, the regulation also covers cases with pending compromise settlement requests, cases with pending abatement requests under RR No. 13-2001, and accounts recorded as “Payable or Due to BIR” in the taxpayer’s books — provided the P80,000 threshold is not breached.

We consistently see micro businesses carry unresolved stop-filer cases or old assessments they assume are too complicated to address. This regulation creates a direct path to close them.

How to Apply

RMC No. 84-2026 clarifies the procedural details of RR No. 4-2026 in question-and-answer format, and RMO No. 19-2026 sets out the corresponding policies and procedures for availment. The process itself is manual and filed at the RDO with jurisdiction over the taxpayer, and each step carries a firm deadline.

1. File the application. Submit Annex “A” of RR No. 4-2026 at your RDO, on a per taxable year basis. Specify the tax types and basic amount due, excluding interest, for each case. Incomplete applications are denied.
2. Verify your classification, if unsure. RMC No. 84-2026 clarifies that taxpayers can confirm their micro taxpayer status through the BIR’s Online Registration and Update System (ORUS), or by coordinating directly with their RDO, before filing.
3. Pay the ₱5,000 abatement fee. Use BIR Form No. 0605, either electronically or manually, within five working days of filing. Use ATC MC350 if filing as an individual, or MC351 if filing as a corporation, both created under RMO No. 18-2026 specifically for this program.
4. Submit proof of payment. Bring or send proof of payment to your RDO within five working days of payment. Missing this deadline automatically voids the application.
5. Receive your Certificate of Availment. Your RDO issues this within five working days of verifying payment. It serves as official closure of the covered case. If your application is denied or withdrawn, the ₱5,000 fee is not refunded. It’s applied instead as partial payment toward the taxes or penalties being abated.

The Deadline

The window closes December 31, 2026, unless extended by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue. Payments made on covered cases before the effectivity of RR No. 4-2026 are not refundable.

If your business has open BIR cases from prior periods and your gross sales are below P3 million, this is worth reviewing before the year ends.

For broader guidance on BIR tax compliance, CloudCFO’s comprehensive tax compliance guide cover the key areas relevant to growing Philippine businesses.

Get This Right Before the Year Ends

RR No. 4-2026 is a time-limited opportunity for micro businesses carrying old BIR obligations to resolve them cleanly. The window is open, but incomplete filings are denied and the process requires preparation.

CloudCFO works with SMEs across the Philippines to keep tax obligations properly managed and penalty exposure minimized. If you need help assessing whether this abatement applies to your situation, get in touch with CloudCFO today.