Briefing on RA 10963: Tax

Reform for Acceleration and

Inclusion (TRAIN) – Penalties
NIRC Provision NIRC TRAIN

General interest 20% interest on any unpaid General interest on unpaid amount of
amount of tax from the date tax is changed to 12% (at double the
prescribed for payment until the rate of legal interest rate for loans or
amount fully paid forbearance of any money in the
absence of an express stipulation as
set by the BSP; prevailing BSP-set
legal interest is 6%)

Additional proviso:
Deficiency and delinquency interest
shall in no case be imposed
simultaneously.

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Deficiency Deficiency interest is assessed and The period when deficiency interest
interest collected from the date prescribed shall stop to run is until full payment
for its payment until full payment OR upon issuance of a notice and
thereof. demand by the BIR Commissioner;
whichever comes earlier.

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 254 Any person who willfully attempts Administrative fine is increased to not
Attempt to evade in any manner to evade or defeat less than P500,000 but not more
or defeat tax any tax imposed under this Code than P10,000,000
or the payment thereof shall, in
addition to other penalties Imprisonment is increased to not less
provided by law, upon conviction than 6 years but not more than 10
thereof; be punished by a fine of years
not less than P30,000 but not
more than P100,000 and suffer
imprisonment of not less than 2
years but not more than 4 years.

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 264 Any person who: Same
Failure or refusal  fails or refuses to issue
to issue receipts receipts/invoices
or invoices  issues receipts/invoices that do
not fully reflect required
information
 uses multiple or double
receipts or invoices
shall upon conviction be punished
by a fine of not less than P1,000
but not more than P50,000 and
suffer imprisonment of not less
than 2 years but not more than 4
years

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 264 Fine of not less than P1,000 but Administrative Fine is increased to
Failure or refusal not more than P50,000 and not less than P500,000 but not more
to issue receipts imprisonment of not less than 2 than P10,000,000
or invoices years but not more than 4 years
for any person who: Imprisonment is increased to not less
 Print receipts/invoices without than 6 years but not more than 10
authority from the BIR years
 Print double or multiple sets of
invoices or receipts Additional punishable offense:
 Print unnumbered Printing of other fraudulent receipts
receipts/invoices not bearing or sales or commercial invoices
the name, business style, TIN
and business address of the
entity

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 264-A No provision Any taxpayer required to transmit
Failure or sales data to the BIR’s electronic
transmit Sales sales reporting system but fails to do
Data Entered on so, shall pay:
Cash Register
Machine/Point of For each day of violation:
Sales System 1/10 of 1% of the annual net income
(POS) Machines as reflected in the Audited FS for the
to the BIR’s second year preceding the current
Electronic Sales taxable year OR P10,000, whichever
Reporting is higher.
System [new]

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 264-A No provision IF the aggregate number of days of
Failure or violation exceed 180 days within a
transmit Sales taxable year, additional penalty shall
Data Entered on be: permanent closure of the
Cash Register taxpayer
Machine/Point of
Sales System The penalty shall not apply if the
(POS) Machines failure to transmit is due to force
to the BIR’s majeure or any causes beyond the
Electronic Sales control of the taxpayer
Reporting
System [new]

TRAIN Briefing – Penalties

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 264-B No provision Covered person shall be any person
Sales who purchase, use, possess, sell or
suppression offer to sell, install, transfer, update,
devices [new] upgrade, keep, or maintain such
automated sales suppression device
or software designed for or is
capable of:
 Suppressing the creation of
electronic records of sale
transactions that a taxpayer is
required to keep under existing
tax laws and/or regulation; or
 Modifying, hiding or deleting
electronic records of sales
transactions and providing ready
means of access to them
TRAIN Briefing – Penalties
VER 1.0 – January 2018
NIRC Provision NIRC TRAIN
Section 264-B No provision Penalty:
Sales Administrative Fine of not less than
suppression P500,000 but not more than
devices [new] P10,000,000 and imprisonment of
not less than 2 years but not more
than 4 years

Cumulative suppression of electronic

sales record in excess of
P50,000,000 shall be considered as
economic sabotage and shall be
subject to maximum penalty

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 265-A No provision Additional punishment for all offenses
Offenses relating relating to fuel marking:
to fuel marking a. Any person engaged in the sale,
trade, delivery, distribution or
transportation of unmarked fuel in
commercial quantity held for
domestic use or merchandise (upon
conviction)
b. Any person who:
 causes removal of the official fuel
marking agent from marked fuel, and
the adulteration or dilution of the fuel
intended for sale to the domestic
market, or

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 265-A No provision  knows the possession, storage,
Offenses relating transfer or offer for sale of fuel
to fuel marking obtained as a result of such removal,
adulteration or dilution
First offense ₱2,500,000
Second ₱5,0100,000
offense
Third offense ₱10,000,000 plus
revocation of license to
engage in any trade or
business

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 265-A No provision c. fine of not less than P1,000,000 but
Offenses relating not more than P5,000,000 AND
to fuel marking imprisonment of not less than 4
years but not more than 8 years for
any person who commits any of the
following acts:
 Making, importing, selling, using
or possessing fuel markers
without express authority
 Making, importing, selling, using
or possessing counterfeit fuel
markers

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 265-A No provision  Causing another person or entity
Offenses relating to commit any of the two
to fuel marking preceding acts
 Causing the sale, distribution,
supply or transport of legitimately
imported, in-transit,
manufactured or procured
controlled precursors and
essential chemicals to any
person or entity penalized under
the preceding and this subsection

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 265-A No provision d. Fine of not less than P5,000,000
Offenses relating but no more than P10,000,000 AND
to fuel marking imprisonment of not less than 4
years but not more than 8 years for
any person who willfully inserts,
places, adds or attaches whatever
quantity of any unmarked fuel,
counterfeit additive or chemical in
the person, house, effects,
inventory, or in the immediate
vicinity of an innocent individual for
the purpose of implicating,
incriminating or imputing the
commission of any violation herein

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 265-A No provision e. Any person authorized, licensed or
Offenses relating accredited to conduct fuel tests,
to fuel marking who issues false or fraudulent test
results knowingly, willfully OR
through gross negligence, shall
suffer additional penalty of
imprisonment from 1 year and 1 day
to 2 years and 6 months

Additional penalties that may be

imposed by the court:
 Revocation of the license to practice
profession in case of a practitioner
 Closure of the fuel testing facility

TRAIN Briefing – Penalties

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 269 No provision Additional punishable offense:
Violations (j) Deliberate failure to act on the
committed by application for VAT refunds within the
Government prescribed period
Enforcement
Officers

TRAIN Briefing – Penalties

VER 1.0 – January 2018