Philippines: RR No. 7-2018: Restoring the Notice of Informal Conference as a Due Process Requirement in the Issuance of a Deficiency Tax Assessment
On January 31, 2018, Finance Secretary Carlos G. Dominguez issued RR No. 7-2018 which restored the provision on Notice of Informal Conference as a due process requirement in the issuance of a deficiency tax assessment. RR No. 7- 2018 was published in the Manila Bulletin on February 1, 2018 and took effect on February 16, 2018.
The Notice of Informal Conference is a written statement issued by the BIR informing the taxpayer of the discrepancies in the taxpayer’s tax payments for the purpose of conducting an informal conference wherein the taxpayer will be given an opportunity to present his side of the case.
The requirement for the Bureau of Internal Revenue (“BIR”) to send taxpayers a Notice of Informal Conference has existed since RR No. 12-19851 which provided for the procedure on administrative protests on assessments of the BIR. This requirement was retained when RR No. 12-19992 was issued on September 6, 1999 to implement the 1997 Tax Code provisions on assessment of taxes, penalties, and interest.
Prior to its amendment by RR No. 18-2013, RR No. 12- 1999 required the BIR to issue the Notice of Informal Conference to the taxpayer if the latter disagrees with the BIR’s findings based on its investigation. RR No. 12-1999 also provided that failure of the taxpayer to respond within fifteen (15) days from date of receipt of the Notice for Informal Conference, shall result in the taxpayer’s default – in which case, the report will be endorsed for appropriate review and issuance of a deficiency tax assessment, if warranted.
However, on November 28, 2013, former Finance Secretary Cesar V. Purisima issued RR No. 18-2013 and amended RR No. 12-1999 to delete the requirement of Notice of Informal Conference.
Carina C. Lafortezais a lawyer and a certified public accountant with extensive tax and corporate practice. Her tax work ranges from tax structuring for both corporations (including how investments are to be made into, and repatriated from, the Philippines) and individuals (including tax planning) to tax compliance (including assisting clients in audits by the Philippine Bureau of Internal Revenue) to tax litigation (including petitions questioning the legality of revenue issuances and local tax ordinances), and tax-related arbitration.
Renz Jeffrey A. Ruizis currently rotating through the firm’s various practice groups. He passed the CPA Licensure Examination in 2010. Prior to joining the SyCipLaw, he was a tax associate at a leading Philippine accounting firm and an accounting supervisor at the Philippine subsidiary of a publicly listed Japanese corporation.
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