Philippines: Tax assessment notices not received by taxpayer were invalid (Supreme Court decision)

Assessment notices were invalid because they were not served to authorized representatives

September 16, 2024

The Supreme Court in a July 2023 decision concerning the validity of tax assessment notices addressed taxpayers' right to due process. The case involved a taxpayer who did not receive the notice of informal conference (NIC), preliminary assessment notice (PAN), and final assessment notice (FAN) directly. Instead, these notices were served to a “client service assistant” and a reliever security guard, neither of whom were authorized representatives of the taxpayer.

According to Section 228 of the Tax Code and Section 3.1.4 of Revenue Regulations No. 12-99, tax authorities must notify taxpayers of assessments in writing, and the FAN must be personally delivered to the taxpayer or their authorized representative. The Supreme Court held that the assessment notices were invalid because they were not served to authorized representatives, stressing that recipients must have the authority to understand the notices’ significance and financial impact.

The Supreme Court emphasized that any assessment failing to comply with due process requirements is void and has no effect.

Read a September 2024 report prepared by the KPMG member firm in the Philippines

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