PENALTIES FOR LATE FILING OF TAX RETURNS

A. For late filing of Tax Returns with Tax Due to be paid, the following penalties will be imposed upon filing, in addition to
the tax due:

1. Surcharge

NIRC SEC. 248. - Civil Penalties.

(A) There shall be imposed, in addition to the tax required to be paid, a penalty equivalent to twenty-five percent (25%)
of the amount due, in the following cases:

(1) Failure to file any return and pay the tax due thereon as required under the provisions of this Code or rules and
regulations on the date prescribed; or

(2) Unless otherwise authorized by the Commissioner, filing a return with an internal revenue officer other than those with
whom the return is required to be filed; or

(3) Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment; or

(4) Failure to pay the full or part of the amount of tax shown on any return required to be filed under the provisions of this
Code or rules and regulations, or the full amount of tax due for which no return is required to be filed, on or before the
date prescribed for its payment.

2. Interest

NIRC SEC. 249. Interest. -

(A) In General. - There shall be assessed and collected on any unpaid amount of tax, interest at the rate of twenty percent
(20%) per annum, or such higher rate as may be prescribed by rules and regulations, from the date prescribed for payment
until the amount is fully paid.

3. Compromise
NIRC SEC. 255. Failure to File Return, Supply Correct and Accurate Information, Pay Tax Withhold and Remit Tax and Refund
Excess Taxes Withheld on Compensation. - Any person required under this Code or by rules and regulations promulgated
thereunder to pay any tax make a return, keep any record, or supply correct the accurate information, who willfully fails
to pay such tax, make such return, keep such record, or supply correct and accurate information, or withhold or remit
taxes withheld, or refund excess taxes withheld on compensation, at the time or times required by law or rules and
regulations shall, in addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less
than Ten Thousand Pesos (P 10,000) and suffer imprisonment of not less than one (1) year but not more than ten (10) years.

Any person who attempts to make it appear for any reason that he or another has in fact filed a return or statement, or
actually files a return or statement and subsequently withdraws the same return or statement after securing the official
receiving seal or stamp of receipt of internal revenue office wherein the same was actually filed shall, upon conviction
therefor, be punished by a fine of not less than Ten Thousand Pesos (P10,000) but not more than Twenty Thousand Pesos
(P 20,000) and suffer imprisonment of not less than one (1) year but not more than three (3) years.

In addition, Annex A of Revenue Memorandum Order (RMO) No. 7-2015 provides for the Revised Consolidated Schedule
of Compromise Penalties for Violations of the National Internal Revenue Code (NIRC), which can be accessed via this
link: Annex

From page 5 of Annex A of RMO No. 7-2015

TAX CRIMINAL
NATURE OF
CODE PENALTY AMOUNT OF COMPROMISE
VIOLATION
SEC IMPOSED
255 Failure to file and/or Fine of not less If the amount of tax unpaid
pay than P10,000
But does
any internal revenue and Compromise
Exceeds not
tax at the time or imprisonment of is
exceed
times required by not less than one
law or regulation (1) year but not P x x x P 5,000 P 1,000
more than 10 5,000 10,000 3,000
years
10,000 20,000 5,000
20,000 50,000 10,000
50,000 100,000 15,000
100,000 500,000 20,000
500,000 1,000,000 30,000
 1,000,000 5,000,000 40,000
5,000,000 xxx 50,000

B. For late filing of Tax Returns with NO Tax Due to be paid, the compromise penalty will be imposed upon filing of the Tax
Return based on the following:

1. For violations of the NIRC provisions which are subject to compromise, the reference is found in page 4 of Annex A of
RMO No. 7-2015.

TAX CRIMINAL
NATURE OF
CODE PENALTY AMOUNT OF COMPROMISE
VIOLATION
SEC IMPOSED
255 Failure to Fine of not less If gross sales, earnings or receipts; or gross estate or gift (based on the
make/file/submit than P10,000 and subject returns/information for filing/submission)
any return or imprisonment of
But does
supply correct not less than one
Exceeds not Compromise is
information at the (1) year but not
exceed
time or times more than ten
required by law or (10) years P xxx P 50,000 P 1,000
regulation 50,000 100,000 3,000
100,000 500,000 5,000
500,000 5,000,000 10,000
5,000,000 10,000,000 15,000
10,000,000 25,000,000 20,000
25,000,000 xxx 25,000

2. For violations of the NIRC provisions which may be the subject of criminal actions, Section 250 of the NIRC will apply as
follows:

NIRC SEC. 250. Failure to File Certain Information Returns. - In the case of each failure to file an information return, statement
or list, or keep any record, or supply any information required by this Code or by the Commissioner on the date prescribed
therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall, upon notice
and demand by the Commissioner, be paid by the person failing to file, keep or supply the same, One Thousand Pesos
(P 1,000) for each failure: Provided, however, That the aggregate amount to be imposed for all such failures during a
calendar year shall not exceed Twenty-Five Thousand Pesos (P 25,000).

C. For late filing of Statements/Reports required to be filed with NO Tax Due to be paid, the compromise penalty will be
imposed upon filing of the Tax Return based on the following:

NIRC SEC. 275. Violation of Other Provisions of this Code or Rules and Regulations in General.- Any person who violates any
provision of this Code or any rule or regulation promulgated by the Department of Finance, for which no specific penalty
is provided by law, shall, upon conviction for each act or omission, be punished by a fine of not more than One Thousand
Pesos (P 1,000) or suffer imprisonment of not more than six (6) months, or both.