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Compromise Agreement Tax
"I need a Tax Compromise Agreement for my manufacturing company to settle PHP 5 million in tax deficiencies with the BIR, to be paid in 12 monthly installments starting January 2025, with the compromise amount being 60% of the original assessment."
1. Parties: Identifies the taxpayer and the Bureau of Internal Revenue (BIR) as the parties to the agreement
2. Background: Outlines the history of the tax assessment, disputes, and circumstances leading to the compromise settlement
3. Definitions: Defines key terms used throughout the agreement
4. Tax Liability Details: Specifies the original tax assessment amount, periods covered, and types of taxes involved
5. Compromise Amount: States the agreed compromise amount and the basis for computation
6. Payment Terms: Details the payment schedule, method of payment, and consequences of default
7. Warranties and Representations: Statements by both parties regarding their authority and capacity to enter into the agreement
8. Waiver and Quitclaim: Taxpayer's waiver of rights to contest the compromise and BIR's acknowledgment of settlement
9. Effectivity and Implementation: Specifies when the agreement takes effect and implementation procedures
10. Governing Law: Confirms Philippine law as governing law and BIR's jurisdiction
11. Execution: Formal closing and signature blocks for all parties
1. Installment Payment Provisions: Include when the compromise amount is to be paid in installments rather than lump sum
2. Surety or Guarantee: Include when additional security for payment is required by the BIR
3. Related Party Provisions: Include when the tax liability involves multiple related entities or consolidated returns
4. Confidentiality: Include when parties agree to keep specific terms confidential, subject to legal disclosure requirements
5. Tax Clearance Process: Include when specific procedures for obtaining tax clearance after settlement need to be detailed
6. Compromise Approval Process: Include when the agreement requires approval from specific BIR officials or committees
1. Schedule A - Tax Assessment Details: Detailed breakdown of original tax assessment, including principal, interests, and penalties
2. Schedule B - Compromise Amount Computation: Detailed calculation of the compromise amount based on BIR guidelines
3. Schedule C - Payment Schedule: If applicable, detailed schedule of installment payments
4. Appendix 1 - Supporting Documents: List of all supporting documents submitted to justify the compromise settlement
5. Appendix 2 - BIR Approvals: Copies of relevant BIR approvals or authorizations for the compromise
6. Appendix 3 - Power of Attorney: If applicable, authorization documents for representatives of either party
Authors
Financial Services
Manufacturing
Retail
Real Estate
Technology
Healthcare
Construction
Mining
Agriculture
Transportation
Education
Professional Services
Hospitality
Energy
Telecommunications
Legal
Finance
Tax
Compliance
Treasury
Accounting
Risk Management
Corporate Secretariat
Internal Audit
Executive Management
Chief Financial Officer
Tax Director
Finance Manager
Corporate Lawyer
Tax Manager
Compliance Officer
Financial Controller
Tax Consultant
Legal Counsel
Finance Director
Treasury Manager
Accounting Manager
Risk Manager
Corporate Secretary
Managing Director
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