The VAP allows taxpayers who have erroneously filed and paid tax returns before Dec. 31 last year to clean up their records and settle their accounts with the government.
It applies to all taxes including one-time transactions like estate tax, donor’s tax, capital gains tax, withholding tax, and documentary stamp tax on the sale, exchange or disposition of real property and shares of stocks.
The VAP, however, does not apply to cases covered by preliminary assessment or final assessment notices, and those with collection letters on or before July 31 this year.
Neither does it apply to tax fraud cases pending in courts nor to unpaid tax liabilities reflected on books of accounts.
Under the compromise settlement program, on the other hand, the BIR can offer compromise payment of tax liabilities on two grounds – when there is "doubtful validity of the tax assessment," and when there is "financial incapacity" on the part of the taxpayers. — Romel Bagares