Tax Alert No. 42 [Revenue Regulation (RR) No. 13-2021 dated 23 June 2021]

The Commissioner of Internal Revenue has issued RR No. 13-2021 to implement the Penalty Provisions under the National Internal Revenue Code (NIRC), as amended by Republic Act No. 10963 or the TRAIN Law.

The following Penalty Provisions are hereby implemented:

Any person who commits any of the following acts:

  1. Printing of receipts or sales or commercial invoices without authority from the Bureau of internal Revenue (BIR); or
  2. Printing of double or multiple sets of invoices or receipts; or
  3. Printing of unnumbered receipts or sales or commercial invoices, not bearing the name, business style, Taxpayer Identification Number, and business address of the person or entity; or
  4. Printing of other fraudulent receipts or sales or commercial invoices.

A penalty amounting to one-tenth of one percent (1/10 of 1%) of the annual net income as reflected in the taxpayer's audited financial statements for the second year preceding the current taxable year, or Ten Thousand Pesos (PHP10,000), whichever is higher, for each day of violation.

Additional penalty of permanent closure will apply if the aggregate number of days of violation exceed one hundred eighty (180) days within a taxable year, except in cases of force majeure or any causes beyond the control of the taxpayer.

Any person who shall purchase, use, possess, sell or offer to sell, install, transfer, update, upgrade, keep, or maintain any software or device designed for, or is capable of:

  1. suppressing the creation of electronic records of sale transactions that a taxpayer is required to keep under existing tax laws and/or regulations; or
  2. modifying, hiding, or deleting electronic records of sales transactions and providing a ready means of access to them.

A fine of not less than Five Hundred Thousand Pesos (PHP500,000) but not more than Ten Million Pesos (PHP10m), and imprisonment of not less than two (2) years but not more than four (4) years.

The maximum penalty provided for in this Section shall apply in case of cumulative suppression of electronic sales records in excess of the amount of Fifty Million Pesos (PHP50m) which shall be considered as economic sabotage.

First Offense PHP2.5m

Second Offense PHP5m

Third Offense PHP10m with penalty of revocation of license to engage in any trade or business.

First Offense PHP2.5m

Second Offense PHP5m

Third Offense PHP10m with penalty of revocation of license to engage in any trade or business.

Imprisonment ranging from one (1) year and one (1) day to two (2) years and six (6) months.

The additional penalties of revocation of the license to practice his profession in case of a practitioner and the closure of the fuel testing facility, may also be imposed at the instance of the court.

The effectivity date of the RR is 1 January 2018.

You may access the full version of the Regulations through the BIR website.