Paying the wrong RDO

What happens if you pay the Capital Gains Tax and Doc. Stamp Tax at the wrong RDO?

Let's say a property in Makati was sold. These are the facts:

+ The property was located in RDO 47 in Makati

+ The Seller's TIN was registered in RDO 49 in Makati

+ The Buyer's TIN was registered in RDO 50 in Makati

So, where do you file the tax return?

By default, you should ALWAYS pay the RDO WHERE THE PROPERTY IS LOCATED.

So what happens if you pay the wrong RDO?

I once consulted a lawyer about this, and he (using logic) claimed that the BIR may not impose penalties because taxes were paid; they just went to a different pocket.

In theory, this is correct. But what does the Revenue Code say about this?

According to Section 248 of the National Internal Revenue Code, paying the wrong RDO is tantamount to non-payment of taxes. This section says explicitly:

"A. For late filing of Tax Returns with Tax Due to be paid, the following penalties will be imposed upon filing, in addition to the tax due:

1. Surcharge

NIRC SEC. 248. - Civil Penalties.

(A) There shall be imposed, in addition to the tax required to be paid, a penalty equivalent to twenty-five percent (25%) of the amount due in the following cases:

...

*** (2) Unless otherwise authorized by the Commissioner, filing a return with an internal revenue officer OTHER THAN THOSE WITH WHOM THE RETURN IS REQUIRED TO BE FILED..."***

Lesson:

1. Be very careful with the filing of tax returns. Personally, I always check the returns prepared by our back office.

2. Be very careful if someone (e.g., examiner, taga-lakad) tells you to pay a different RDO other than the RDO where the property is located.

Currently, we're experiencing this for a transaction. The BIR officer advised that the tax filing should be in a different RDO because the transaction was a donation between two foreigners.

3. If you accidentally pay the wrong RDO, you could have the payment transferred to the correct RDO. However, surcharges and interest would still be applied if you missed the deadlines. This is one reason you'd want to pay the taxes as soon as possible and not wait until the last day.