CREATE Act and Tax Law

• Focus on simplifying tax procedures and stimulating economic growth by attracting foreign investment is the primary goal of the CREATE Act.
• The CREATE Act does not introduce new taxes on digital services.

Tax Law and Liabilities

• Excise Tax is not subject to limitations by the Local Government Code.
• Tax evasion involves unlawful means to avoid tax liability.
• Under the TRAIN Law, the highest personal income tax rate is 35%.
• Government projects and services are funded by income tax.
• Group-term life insurance up to $50,000 is an example of a fringe benefit excluded from taxable income.
• Starting a side business provides tax advantages through deductible expenses.
• Deficiency and delinquency interest cannot be imposed simultaneously based on the TRAIN Law.
• A 50% surcharge applies to willful neglect or fraudulent returns, while 25% applies to late filing, incorrect filing location, and non-payment.
• Delinquency interest is charged for the late payment of a tax assessment.
• Deficiency interest accrues from the original due date of the tax payment until fully paid.
• Tax avoidance is legal deductions from a business entity.
• Tax evasion involves illegally reducing tax liability by lying or omitting numbers on tax filings.
• The incorrect tax amount paid by Phillips due to a typographical error was P15,476.15.
• A civil suit for tax collection can still be filed after a criminal conviction or acquittal.
• An individual whose sole income has been subjected to final withholding tax is not required to file an income tax return.
• A taxpayer with income subject to special/preferential tax rates is required to use the itemized deduction method instead of the Optional Standard Deduction (OSD).
• BIR Form 1701 is used for annual income tax returns for individuals.
• Substituted filing is available for employees with purely compensation income from a single employer.
• A tax liability that has already been fully paid before the effectivity of the regulations is not eligible for the Tax Amnesty on Delinquencies.
• To avail of the tax amnesty, if a taxpayer failed to remit withheld taxes, 100% of the basic tax assessed must be paid.
• Taxpayers mandated to use eFPS and eBIRForms but continue to file manually face a Php 1000 penalty and a 25% surcharge
• Employees deriving purely compensation income are exempted from the mandatory use of eBIRForms and electronically filling "No payment Returns".
• The second installment of individual income tax is due on October 15 of the same year, according to Revenue Regulation 8-2018.
• Manual cash payment at the BIR National Office is not an accepted mode of payment for Large Taxpayers.
• Constructive distraint allows a taxpayer to freely sell the distrained property.
• Paying the correct tax on time is not a reason for skipping the Preliminary Assessment Notice (PAN).
• The government has five years to collect assessed taxes through distraint, levy, or court proceedings for tax fraud cases.
• A waiver of the statute of limitations is a bilateral agreement between the taxpayer and the BIR.
• Penalties may be reduced or canceled when administrative and collection costs exceed the amount to be collected from the taxpayer.
• Reduction of the tax amount due to financial hardship is not a remedy the government can use to collect delinquent taxes.