EOPTA Revenue Regulations No. 6-2024: Reduced Interest and Penalty Rates for Micro and Small Taxpayers

These regulations will mean lower interest and penalty charges for micro and small taxpayers.

Penalties for Not Following the Rules::

• If you miss the deadline for filing your tax return or paying your tax, you will be charged a penalty of 10% of the amount you owe.
  
• If you don’t pay a tax shortfall within the given timeframe stated in the assessment notice, you will also face a penalty.
  
• Similarly, not paying the full amount of tax shown on your required tax return by the deadline will result in penalties.

Penalties for Intentional Neglect or Fraud:

• There will be a penalty of 50% of the tax or tax shortfall for intentionally not filing a tax return on time or for submitting a false or fraudulent return.
  
• If you fail to report your sales or income properly, or overstate your deductions by more than 30%, it will be considered evidence of a false or fraudulent return.

Reduced Interest Charges:

• The interest rate on unpaid taxes for eligible taxpayers will be 6%, which is just half of the standard rate set by the Tax Code. Any change in this interest rate will be communicated separately.

Penalties for Not Providing Information:

• If you fail to file an information return, statement, list, or provide necessary information within the given time, a penalty will be imposed for each failure, up to a maximum of PHP 12,500 a year.

Reduced Compromise Penalties:

• For certain criminal violations not related to fraud as outlined in Sections 113, 237, and 238 of the Tax Code, a reduced compromise penalty rate of 50% will be applied based on a valid agreement with the Commissioner of Internal Revenue (CIR). Any change in the amount of the compromise penalty will require approval from the CIR or authorized representatives.

Minimize Your Penalties

Understanding and following new tax regulations can be complicated, especially for small businesses. CloudCFO’s tax services can help you navigate these changes and reduce penalties.