Pertinent Portions of Revenue Memorandum Order No. 1-90, Entitled "Amendments to the Provisions of a Revised Schedule of Compromise Penalties for Internal Revenue Violations, as Prescribed in RMO No. 26-86, Relevant to the Collection of Taxes Abroad"

February 1, 1990 REVENUE MEMORANDUM CIRCULAR NO. 017-90 SUBJECT : Pertinent Portions of Revenue Memorandum Order No. 1-90, Entitled "Amendments to the Provisions of a Revised Schedule of Compromise Penalties for Internal Revenue Violations, as Prescribed in RMO No. 26-86, Relevant to the Collection of Taxes Abroad" TO : The Revenue Attache, Riyadh, Kingdom of Saudi Arabia All Revenue Representatives and Officers of the Department of Foreign Affairs Authorized to Collect Internal Revenue Taxes Abroad; and Others Concerned. For Internal revenue tax purposes, the pertinent portions of Revenue Memorandum Order No. 1-90, relevant to the collection of taxes abroad are quoted below: "I. Objectives : This Order is issued: A. To update the Schedule of Compromise Penalties with a view to increase the compromise penalties and delete from the coverage thereof certain acts commonly resorted to by taxpayers as a means of tax evasion; B. To reflect the changes in the Schedule which includes the Code Section, Nature of Violation, Criminal Penalty imposed and Amount of Compromise Penalty which are prescribed on Chapter II, Title X of the revised NIRC; C. To adopt and implement a uniform application of the various compromise penalties for criminal violations of the Tax Code; and cd i D. To provide supplemental guidelines on compromise penalties for resident taxfilers and non-residents as well." "II. Policies : Certain acts/violations which are commonly resorted to and applicable to non-resident taxpayers are imposed the same amount of compromise penalty as the resident taxpayers." "III. Guidelines and Instructions : 1. The internal revenue officers concerned shall apply the Revised Schedule of Compromise Penalties embodied in Annex "A" to ensure uniformity of action. 2. In no case shall the compromise penalty differ in amount from those specified in the aforementioned Schedule, except when duly approved by the Commissioner or, in a proper case, by the Regional Directors. 3. Although all amounts of compromise penalties incident to violations shall be itemized in the assessment notice and/or demand letter along with the other administrative penalties like surcharge and interest, the same should not form part of the total amount assessed/demanded but should appear separately as a suggestion to the taxpayer to pay lieu of criminal prosecution. If paid, the compromise penalties shall be collected and accounted for under the usual procedures, as internal revenue. 4. Since compromise penalties are only amounts suggested in settlement of criminal liability, and may not therefore be imposed or exacted on the taxpayer in the event that a taxpayer refuses to pay the suggested compromise penalty, the violation shall be referred for criminal action as heretofore mentioned. cd i 5. Non-resident filers who commit any of the violations stated in the schedule shall pay the equivalent amount of compromise penalty in pesos or its equivalent in U.S. dollars." (Note: In the implementation of No. 5, above, reference should be made to Revenue Memorandum Circular No. 77-89, dated December 19, 1989, prescribing a uniform exchange rate of U.S. Dollar for the collection of taxes abroad. The said Circular has earlier been circularized.) "IV. Repealing Clause : All other orders which are inconsistent herewith are hereby repealed or revoked accordingly." "V. Effectivity : This Order shall take effect immediately." All revenue officers and other officials charged with the enforcement of internal revenue laws are enjoined to adhere to the provisions of this Circular and urged to give the same the widest publicity possible. (SGD.) JOSE U. ONG Commissioner of Internal Revenue