Implementing the Penalty Provisions under Sections 76 to 80 of R.A. No. 10963, Amending, and Adding Certain Sections to the NIRC of 1997, as Amended

June 23, 2021 REVENUE REGULATIONS NO. 13-21 SUBJECT : Implementing the Penalty Provisions under Sections 76, 77, 78, 79 and 80 of Republic Act No. 10963, Also Known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, Amending Sections 254 and 264 of, and Adding Sections 264-A, 264-B, and 265-A to the National Internal Revenue Code of 1997, as Amended TO : All Internal Revenue Officials and Others Concerned SECTION 1. Scope . Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended (NIRC), these Regulations are hereby promulgated to implement Sections 76, 77, 78, 79 and 80 of Republic Act (RA) No. 10963, otherwise known as the TRAIN Law. HTcADC SECTION 2. Attempt to Evade or Defeat Tax . A fine of not less than Five Hundred Thousand Pesos (P500,000) but not more than Ten Million Pesos (P10,000,000) and imprisonment of not less than six (6) years but not more than ten (10) years shall, upon conviction thereof, be imposed on any person who willfully attempts, in any manner, to evade or defeat any tax imposed under the NIRC or the payment thereof. The fine and penalty stated herein shall be in addition to other penalties provided for by law. The conviction or acquittal obtained for violation of this Section shall not be a bar to the filing of a civil suit for the collection of taxes. SECTION 3. Violations Related to the Printing of Receipts or Invoices . A fine of not less than Five Hundred Thousand Pesos (P500,000) but not more than Ten Million Pesos (P10,000,000) and imprisonment of not less than six (6) years but not more than ten (10) years shall be imposed on any person who commits any of the acts enumerated hereunder: (1) Printing of receipts or sales or commercial invoices without authority from the Bureau of Internal Revenue; or (2) Printing of double or multiple sets of invoices or receipts; or (3) Printing of unnumbered receipts or sales or commercial invoices, not bearing the name, business style, Taxpayer Identification Number, and business address of the person or entity; or (4) Printing of other fraudulent receipts or sales or commercial invoices. SECTION 4. Failure to Transmit Sales Data . A penalty amounting to one-tenth of one percent (1/10 of 1%) of the annual net income as reflected in the taxpayer's audited financial statements for the second year preceding the current taxable year, or Ten thousand pesos (P10,000), whichever is higher, shall be imposed, for each day of violation, on any taxpayer required but fails to transmit sales data to the Bureau's electronic sales reporting system under Section 237-A of the NIRC, as amended. An additional penalty of permanent closure of the taxpayer shall be imposed should the aggregate number of days of violation exceed one hundred eighty (180) days within a taxable year. The penalty shall not apply if the failure to transmit is due to force majeure or any causes beyond the control of the taxpayer. SECTION 5. Purchase, Use, Possession, Sale or Offer to Sell, Installation, Transfer, Update, Upgrade, Keeping or Maintaining of Sales Suppression Devices . A fine of not less than Five hundred thousand pesos (P500,000) but not more than Ten million pesos (P10,000,000), and imprisonment of not less than two (2) years but not more than four (4) years shall be imposed on any person who shall purchase, use, possess, sell or offer to sell, install, transfer, update, upgrade, keep, or maintain any software or device designed for, or is capable of: (a) suppressing the creation of electronic records of sale transactions that a taxpayer is required to keep under existing tax laws and/or regulations; or (b) modifying, hiding, or deleting electronic records of sales transactions and providing a ready means of access to them. The maximum penalty provided for in this Section shall apply in case of cumulative suppression of electronic sales record in excess of the amount of Fifty million pesos (P50,000,000) which shall be considered as economic sabotage. SECTION 6. Offenses Related to Fuel Marking . The following penalties shall, upon conviction, apply to any person who commits offense/s related to fuel marking: CAIHTE Offenses/Violations Penalty First Offense P2,500,000 (a) Engaging in the sale, trade, delivery, distribution or transportation of unmarked fuel in commercial quantity held for domestic use or merchandise Second Offense P5,000,000 Third Offense P10,000,000 *Third Offense is with penalty of revocation of license to engage in any trade or business. (b) Causing the removal of the official fuel marking agent from marked fuel, and the adulteration or dilution of fuel intended for sale to the domestic market, or the knowing possession, storage, transfer or offer for sale of fuel obtained as a result of such removal, adulteration or dilution. First Offense P2,500,000 Second Offense P5,000,000 Third Offense P10,000,000 *Third Offense is with penalty of revocation of license to engage in any trade business. (c) Willfully inserting, placing, adding or attaching, directly or indirectly, through any overt or covert act, 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 of offenses related to fuel marking. A fine of P5Million but not more than P10Million and imprisonment of not less than four (4) years but not more than eight (8) years. (d) Making, importing, selling, using or possessing fuel markers without express authority A fine of P1Million but not more than P5Million and imprisonment of not less than four (4) years but not more than eight (8) years (e) Making, importing, selling, using or possessing counterfeit fuel markers A fine of P1Million but not more than P5Million and imprisonment of not less than four (4) years but not more than eight (8) years (f) Causing another person or entity to commit any of the two (2) preceding acts in (d) and (e) hereof A fine of P1Million but not more than P5Million and imprisonment of not less than four (4) years but not more than eight (8) years (g) Causing the sale, distribution, supply or transport of legitimately imported, in-transit, manufactured or procured controlled precursors and essential chemicals, in diluted mixtures or in concentrated form, to any person or entity penalized in (a), (b), (d), (e) and (f) hereof, including but not limited to, packaging, repackaging, labeling, relabeling or concealment of such transaction through fraud, destruction of documents, fraudulent use of permits, misdeclaration, use of front companies or mail fraud. P1Million but not more than P5Million and imprisonment of not less than four (4) years but not more than eight (8) years Any person who is authorized, licensed or accredited to conduct fuel tests, who issues false or fraudulent fuel test results knowingly, willfully or through gross negligence, shall suffer the additional penalty of imprisonment ranging from one (1) year and one (1) day to two (2) years and six (6) months. The additional penalties of revocation of the license to practice his profession in case of a practitioner, and the closure of the fuel testing facility, may also be imposed at the instance of the court. The penalties stated herein for offenses related to fuel marking are in addition to the penalties imposed under Title X of the NIRC, as amended, Section 1401 of Republic Act (RA) No. 10863, otherwise known as the " Customs Modernization and Tariff Act (CMTA), " and other relevant laws. SECTION 7. Repealing Clause . Any rules and regulations, issuances or parts thereof inconsistent with the provisions of these Regulations are hereby repealed, amended or modified accordingly. SECTION 8. Separability Clause . If any provisions of these Regulations shall be held unconstitutional or invalid, the other provisions not otherwise affected shall remain in full force and effect. SECTION 9. Effectivity . These Regulations shall take effect on January 1, 2018, the effectivity of the TRAIN Law. aScITE (SGD.) CARLOS G. DOMINGUEZ III Secretary of Finance Recommending Approval: (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue