By: Karla Rose E. Gutierrez

To encourage tax payments, boost revenue collection and sustain government programs during the COVID-19 pandemic, the Bureau of Internal Revenue provided an avenue by which taxpayers may pay additional taxes in exchange for exemption from audit of internal revenue taxes for the calendar year ending December 31, 2018 and fiscal year 2018 ending on the last day of the months of July 2018 to June 2019. This new program is called the Voluntary Assessment and Payment Program (VAPP) under Revenue Regulations (RR) No. 21-2020.[1]

Aside from revenue collection, this program aims to limit taxpayer contact considering the COVID-19 pandemic.

The following are the features of the VAPP:

  1. Who may avail of the VAPP?

As a general rule, persons, whether natural or juridical, including estates and trusts, liable to pay internal revenue taxes, who due to inadvertence or otherwise, erroneously paid internal revenue tax liabilities or failed to file tax returns and pay the taxes due from them, are qualified to avail of the VAPP.

Qualified persons can avail of the benefits of the VAPP until December 31, 2020, unless extended by the Secretary of Finance.


  1. Who are disqualified to avail of the VAPP?

The following cannot avail of the VAPP:

  1. Those taxpayers who have already been issued a Final Assessment Notice (FAN) that have become final and executory, on or before the effectivity of RR No. 21-2020;
  2. Persons under investigation as a result of verified information filed by a tax informer under Section 282 of the National Internal Revenue Code of 1997, as amended (NIRC), with respect to the deficiency taxes that may be due out of such verified information;
  3. Those with cases involving tax fraud filed and pending before the Department of Justice or in the courts; and
  4. Those with pending cases involving tax evasion and other criminal offenses under Chapter II of Title X of the NIRC.
  1. What is coverage of the VAPP?

VAPP is applicable to all internal revenue taxes covering the taxable year ending December 31, 2018, and fiscal year 2018 ending on the last day of the months of July 2018 to June 2019, including taxes on One-Time Transactions (ONETT) such as Estate Tax, Donor’s Tax, Capital Gains Tax, as well as ONETT-related Creditable Withholding Tax/Expanded Withholding Tax and Documentary Stamp Tax.

  1. What are the privileges granted under the VAPP?

Successful VAPP applicants may enjoy the following privileges:

  1. Those who do not have existing audits for 2018 will get immunity from a subsequent audit for the tax types covered by the VAPP availment. The availment for each tax type will be further discussed below; and
  2. Withdrawal of Letters of Authority, Tax Verification Notices, Discrepancy Notices, Notices for Informal Conference, Preliminary Assessment Notices and Formal Assessment Notices for those with existing 2018 tax audit and investigation.


  1. What are the requirements in order to avail of the VAPP privileges?

To avail of the benefits under the VAPP, the following documents must be submitted to the BIR:


a. Duly accomplished Application Form (BIR Form No. 2119–2 copies);


b. Payment Form (BIR Form No. 0622) with proof of payment (3 copies);


c. Filed tax returns, proof of payment of 2017 and 2018 taxes and audited Financial Statements for the covered taxable year for taxpayers availing of the VAPP for income tax, VAT, Percentage Tax, Excise Tax, and DST, other than DST on One-Time Transactions (ONETT);


d. Copy of remittance returns and proof of payment of final and creditable withholding taxes for taxpayers availing of the VAPP for withholding taxes;


e. Copy of duly filed BIR Form 0605 stamped either by the Authorized Agent Banks (AABs) or Revenue Collection Officers (RCOs) duly signed by the Large Taxpayer (LT) Office/RDO where the taxpayer is registered and proof of payment representing settlement of previous deficiency tax, with or without an assessment notice, if any, covering the calendar/ fiscal year 2018;
f. Duly accomplished ONETT tax return(s) (BIR Form Nos. 1800, 1801, 1706, 1707, 2000 OT, 0619-E) and corresponding documentary requirements for the transaction of taxpayers availing of the program for ONETT.


The mode of payment shall be cash. Non-cash modes of payment, such as Tax Debit Memo and the like, will not qualify as valid payment.

  1. What are the minimum amounts of taxes to be paid in order to avail of the privileges under the VAPP?

The minimum amounts of taxes to be paid in order to avail of the privileges under the VAPP are as follows:

  1. For Income Tax (IT), Value-Added Tax (VAT), Percentage Tax (PT), Excise Tax (ET), and Documentary Stamp Tax other than DST on ONETT:



Increase/Decrease in the Total Taxes Due from 2017 to 2018


Amount of Voluntary Tax Payment whichever is higher of –


Minimum Amount

Net increase of not more than 10%





3% of 2018 gross sales or 7% of 2018 taxable net income Individuals, estates, and trusts – P75,000


Corporations –

a)      With subscribed capital of more than P50 million –P1,000,000


b)      With subscribed capital of more than P20 million up to P50 million –  P500,000


c)       With subscribed capital of more than P5 million up to P 20 million – P250,000



d)      With subscribed capital of P5 million and less – P100,000


Other juridical entities, including, but not limited to cooperatives, foundations, general professional partnerships – P75,000


Net increase of more than 10% up to 30%





2% of 2018 gross sales or 6% of 2018 taxable net income
Net increase of more than 30%






1% of 2018 gross sales or 5% of 2018 taxable net income
Net decrease of not more than 10%





4% of 2018 gross sales or 8% of 2018 taxable net income
Net decrease of more than 10%







5% of 2018 gross sales or 9% of 2018 taxable net income


The amount to be paid must be the higher amount in column B, but in no case should be less than the amount in column C. Total taxes due in 2017 and 2018, for purposes of the above schedule, refer to the sum of all tax due per tax return (IT, PT, ET and DST) and net VAT payable (VAT) before deducting any Creditable Withholding Tax, quarterly payment or advance payment.

  1. Where should the VAPP application be filed?

VAPP applications can be filed personally or through courier. The application form together with the complete documentary requirements shall be filed in duplicate (original for the LT Office/ RDO and duplicate for the taxpayer) with the LT Office/RDO having jurisdiction over the taxpayer.

            For ONETT involving sale of real property, the application form shall be filed with the RDO having jurisdiction over the location of the property. For donations, the application shall be filed with the RDO having jurisdiction over the domicile of the donor.

The taxes shall be paid before any AAB or RCO within the jurisdiction of the foregoing LT Office or RDOs.

  1. What are the procedures followed in reviewing VAPP applications?

VAPP applications will be processed by the concerned revenue officials within thirty (30) working days from their receipt of the same.

If the review reveals deficiencies or defects in the VAPP availment, the approving official shall notify the concerned taxpayer through the email address provided in BIR Form No. 2119. Failure to act and/or pay the required amount on the part of the taxpayer within 10 working days shall result in the denial of the application.

A Certificate of Availment shall be issued by the concerned LT Office/RDO within three (3) working days from approval of the application. The Certificate shall serve as proof of the taxpayer’s availment of the VAPP, compliance with the requirements and entitlement to the privileges granted under RR No. 21-2020.

Note that voluntary payments under the VAPP are made before review and validation by the BIR. There is no pre-approval process. The application can be subsequently rendered invalid or defective upon review by the BIR. However, any payment may be applied against any deficiency tax liability for the taxable year 2018, in case of audit/investigation.

  1. What are the instances when a Certificate of Availment may be invalidated?

Despite issuance of a Certificate of Availment, the taxpayer’s VAAP availment may be invalidated under the following instances:

  1. When there is strong evidence or findings of under-declaration of sales, receipts or income or overstatement of deductions by more than 30% based on a written report of the appropriate revenue official stating the facts with supporting documents; and/or
  2. When there is verifiable information that the taxpayer has withheld but failed to remit withholding taxes.

As mentioned above, any voluntary payment may be applied against the deficiency tax due, if any, that may be assessed against the taxpayer after the audit/investigation.

  1. Will the taxpayers be entitled to refund or tax credit for payments made under the VAPP?

No. Any payment under the VAPP shall be construed as a waiver of the taxpayer’s right to claim refund or credit, notwithstanding the fact that such payment was erroneously made.

[1]Dated August 18, 2020 and issued on September 5, 2020


23rd Floor, Multinational Bancorporation Centre,
6805 Ayala Avenue, Makati City 1226 Philippines
Mailing Address : MCPO Box 2697 Makati City 1200 Philippines

E-mail Address: [email protected]
Telephone No.: (632) 8812-8670 (connecting all departments)
Telefacsimile: (632) 8812-7199, (632) 8812-4251

Website Policy Statement

© 2019 Fortun Narvasa & Salazar.