EOPTA: Tax Penalties for Late Filing of Income Tax Return

Tax penalties and surcharges aim to encourage taxpayers to file and pay taxes promptly, avoiding compounding tax liabilities. Under RA 10963, also known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the penalties for late filing are as follows:

Surcharges for Late Filing:
A penalty of 25% of the tax amount due is imposed in the following cases:

• Failure to file the tax return on or before the due date.
• Failure to pay the full amount of tax due.

Annual Interest for Deficiency of Tax:

• A 12% annual interest is imposed on unpaid taxes.
• This interest applies from the due date of the return until the full payment of tax.

Compromise Penalty:

• The penalty depends on the unpaid tax amount and the circumstances.
• A compromise penalty starts at ₱1,000 per late filing of returns and is administratively determined by the Commission to settle violations without resorting to criminal prosecution.

1. Surcharges for Late Filing: reduced from 25% to 10% of the tax amount due.
2. Annual Interest for Deficiency of Tax: reduced from 12% per annum to 6% per annum.
3. Compromise Penalties: a 50% reduction in penalties for the following cases:
   • Failure to file an information return, statement, or list.
   • Failure to keep records.
   • Failure to supply any information.

Specific Penalties:

• ₱500 per failure.
• The aggregate penalty for all such failures in a calendar year shall not exceed ₱12,500.
• These penalties apply to records or information required by the Tax Code or by the Commissioner of Internal Revenue (CIR).

4. Criminal Violations (Non-Fraudulent):

• Applies to violations under:
  • Section 113 (Invoicing and accounting requirements).
  • Section 237 (Issuance of invoices).
  • Section 238 (Printing of invoices).
• Note: The compromise penalties for cases other than those listed above remain unchanged.

The policies and guidelines prescribed under RMO No. 7-2015, RMC No. 3-2022, and other relevant revenue issuances, rules, and regulations remain applicable