Taxation 1 Limitations on Remedies ABSantos, CPA

LIMITATIONS ON REMEDIES

1. WHAT ARE THE LIMITATIONS TO THE ASSESMENT POWER OF THE

STATE?

Prescription. Through lapse of time a right may either be extinguished acquired. The
power of the state to assess (investigate audit) taxpayer shall prescribed after THREE (3)
YEARS from the date the return is due (required by law) or filed whichever is later.
Exception:
1) FAILURE TO FILE A RETURN: TEN (10) YEARS from the date of the
discovery of the omissions file the return:
2) FALSE OR FRADULENT RETURN with INTENTION TO EVADE THE TAX;
TEN (10) YEARS from the date of the discovery of the falsity or fraud

2. WHEN WILL THE PRESCRIPTIVE PERIOD COMMENCE IN CASE OF AN

AMENDED RETURN?

If the amendment return is substantially different from the original return, the
prescriptive period shall be counted from the filing of the amendment return. But the
said period shall run from the filing of the original return if the same is sufficiently
complete to enable the Commissioner to make proper assessment.
When Substantive:
Substantial under declaration (exceeding 30% of that declared) of taxable sales,
receipts or income, or a substantial overstatement (exceeding 30% of actual deductions)
of deductions.
3. WHAT IS THE LIMITATION TO THE COLLECTION POWER OF THE
STATE?

The state’s power to collect tax shall prescribe within

5 years- from assessment or within period of collection agreed upon in writing
before expiration of the 5-year period.
10 years- without assessment in case of false or fraudulent return with intent to
evade or file return.
4. WHAT ARE THE GROUNDS FOR SUSPENSION OF THE RUNNING OF THE
STATUTE OF LIMITATION?

Page 1 of 2
Taxation 1 Limitations on Remedies ABSantos, CPA

A. When the CIR is prohibited (by TRO) from making the assessment or
beginning the distraint or levy or a proceeding in court, and for sixty (60) days
thereafter.
B. When the taxpayer request for a consideration which is granted by the CIR.
C. When the taxpayer cannot be located in the address given by him in the return,
unless he informs the CIR of any changes in his address.
D. When the warrant of distraint or levy is duly served, and no property is located;
and
E. When the taxpayer is out of Philippines.

5. WHAT ARE THE PRESCRIPTIVE PERIODS FOR THE VIOLATIONS OF ANY

PROVISION OF THE TAX CODE?

Should be fined within FIVE (5) YEARS from the (1) day of the commission of
the violation of the law, and if the same be not known, from the (2) discovery thereof and
the institution of the judicial proceeding for its investigation and punishment.
6. WHAT ARE THE DIFFERENT PRESCRIPTIVE PERIODS FOR PROTEST?

A. A protest must be filled within 30 days from receipt of assessment.

B. Submit support document within 60 days from date of the filing of the protest
C. If protest is denied; appeal the matter to the Division of the Court of Tax
Appeals (CTA) within 30 days from receipt of final decision CIR or if the CIR
fails to act on protest within 180 days from date of submission of evidentiary
documents by taxpayer, whichever comes first.
D. Appeal within 15 days to the CTA en banc from receipt of the CTA en banc
denial decision.
E. Appeal to the Supreme Court within 15 days from receipt of the CTA en banc
denial decision.

7. WHAT ARE THE PRESCRIPTIVE PERIODS FOR REFUND?

A. Claim for refund must be made within 2 years from date of payment.
B. In case of the CIR’s denial of the claim for refund, the 30-day period to appeal
with the CTA must be within the 2- year preemptory period for instituting
judicial action.

Page 2 of 2