(NAR) VOL. II NO. 2 / APRIL - JUNE 1991
Illustrative Examples:SECTION 3. Repealing Clause. All regulations, rulings, orders or portions thereof which are inconsistent with the provisions of these regulations are hereby revoked.
After audit of the books of accounts of ABC Company, it was ascertained that it was liable to pay deficiency income tax of P100,000.00. The computation of deficiency interest will be as follows:
Case A If the tax payer’s accounting period ends December 31, 1989, and 1. The deficiency tax is payable on March 31, 1991 and the MRR as of March 4, 1991 is 30%: Basic tax due P100,000.00Surcharge (25% of P100,000) 25,000.00 __________Basis of interest computation P125,000.00 =========Deficiency interest 20% per annum from April 16, 1990 P 22,054.80 up to March 3, 1991 (322 days) *130% per annum from March 4, 1991 up to March 31, 1991 (27 days) 2,773.98 __________Total deficiency interest P 24,828.78 =========2. The deficiency tax is payable on March 31, 1991 and the MRR as of March 4, 1991 is 18%: Basic tax due P100,000.00Surcharge (25% of P100,000.00) 25,000.00 __________Basis of interest computation P125,000.00 =========Deficiency interest **220% per annum from April 16, 1990 up to March 31, 1991 (349 days) P 23,904.11 =========Case B If the taxpayer’s accounting period ends December 31, 1990, and 1. The deficiency tax is payable on October 15, 1990, and MRR as of October 7, 1991 is 25%. Basic tax due P100,000.00Surcharge (25% of P100,000.00) 25,000.00 __________Basis of interest computation P125,000.00 =========Deficiency interest **220% per annum from April 16, 1990 up to October 15, 1991 (183 days) P 15,667.81 =========2. The deficiency tax is payable on October 15, 1991 and the MRR as of October 7, 1991 is 15%: Basic tax due P100,000.00Surcharge (25% of P100,000.00) 25,000.00 __________Basis of interest computation P125,000.00 =========Deficiency interest **220% per annum from April 16, 1990 up to October 15, 1991 (183 days) P 12,534.25 =========Case C The deficiency tax on Case B(1) is payable in two installments beginning October 15, 1991 with the following MRR on the first Monday of the installments months October 7, 1991 …………25%
November 4, 1991 ……….26%Basic tax due P100,000.00Surcharge (25% of P100,000.00) 25,000.00 __________Basis of interest computation P125,000.00 =========1. Deficiency interest deficiency tax payable on October 15, 1991 *125% per annum from April 16, 1991 up to October 15, 1991 (183 days) on installment payment of P62,500.00 P 7,833.90 =========2. Deficiency tax payable on December 15, 1991 *126% per annum from April 16, 1991 up to November 15, 1991 (214 days) on installment payment of P62,500.00 P 9,527.40 __________Deficiency interest P17,361.00 =========Case D Under the same set of facts in Case A(1), if the amount demanded for payment in the assessment notice was not paid on the due date, March 31, 1991, but the deficiency tax was paid on April 30, 1991 and MRR on April 1, 1991 is 27%: Total amount due on March 31, 1991 per letter of demand P149,828.78Surcharge (25% of P149,828.78) 37,457.20 __________Basis of interest computation P187,285.98 =========Delinquency interest *127% per annum from April 1, 1991 up to April 30, 1991 (30 days) P 4,156.21 =========
(SGD.) JESUS P. ESTANISLAO Secretary of Finance | (SGD.) JOSE U. ONG Commissioner of Internal Revenue |