Request for the Waiver of the Surcharge and Penalties for Failure to Remit the Withheld Tax on Compensation Income on Time

April 20, 1992 BIR RULING NO. 130-92 248 (a) 254 128-80 130-92 Philippine Exhibition Services Organization, Inc. 3/F Fortune Office Building 120 Legaspi Street, Legaspi Village Makati, Metro Manila Attention: Evelyn D . Garcia Finance and Admin . Manager Gentlemen : This refers to your letter dated July 23, 1991 requesting for the waiver of the surcharge and penalties for failure to remit the withheld tax on compensation income on time. It appears that Philippine Exhibition Services Organization, Inc. is a duly authorized withholding agent with Taxpayer Account No. P4211-Li287-A-4 and Identification No. WT32AO4B-107116; that on January 17, 1990, it remitted the income taxes withheld from its employees for the period covering the month of December 1989; that the company suffers financial reverses starting the early part of 1990; hence, the delay in the remittance of the income tax withheld from its employees covering the period of December 1989. In reply, please be informed that pursuant to Revenue Regulations No. 5-85, amplifying Section 74 of the Tax Code, taxes deducted and withheld on compensation income shall be remitted within ten (10) days after the end of each calendar month. Since the taxes you deducted and withheld on compensation income cover the period December 1989, remittance thereof should have been made not later than January 10, 1990. However, since remittance was actually made only on January 17, 1990, there was therefore a delay in the remittance of the aforesaid withheld taxes pursuant to Revenue Regulations No. 5-85; hence, you are subject to the 25% surcharge under Section 248(a) of the Tax Code. Moreover, you are also subject to the compromise penalty of P8,500.00 pursuant to RMO No. 1-90 implementing Section 254 of the Tax Code. cdta Very truly yours, JOSE U. ONG Commissioner of Internal Revenue