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I. Administrative Level
A. Assessment
Procedure:
Compromise Abatement
Nature
Involves a reduction of the Involves the cancellation of the
taxpayers liability entire tax liability of a taxpayer
Officer/s authorized
CIR and Regional Evaluation CIR
Board (P500,000 or less) (Sec.
7B, NIRC)
Grounds
1. Reasonable doubt as to 1. The tax or any portion
validity of assessment; or thereof appears to unjustly
2. Financial incapacity of or excessively assessed; or
taxpayer 2. The administration and
collection costs involved do
not justify the collection of
the amount due.
Compromise a contract whereby the parties, by
making reciprocal concessions, avoid litigation or
put an end to one already commenced. (Art.
2028, Civil Code)
CIVIL CASES
1. Doubtful validity
Minimum Compromise Rate: 40% of basic
tax assessed
2. Financial incapacity
Minimum Compromise Rate: 10%, 20% or
40% of basic tax assessed, depending upon
the condition of the taxpayer.
1. 25% surcharge
1. Deficiency interest
2. Delinquency interest
3. Interest on extended payment
A. Civil Action
3. No subsidiary imprisonment
Before payment
I. Administrative Level
A. Protest