REVENUE MEMORANDUM CIRCULAR NO. 90-2007 issued on December 18, 2007 amends the provisions of Question and Answer (Q & A) No. 28 of Revenue Memorandum Circular (RMC) No. 69-2007, which clarifies issues concerning the Tax Amnesty Program under Republic Act (RA) No. 9480 as implemented by Department Order (DO) No. 29-07. Q and A No. 28 is revised to read as follows:

Q-28

If a company which is in a deficit position (negative networth) amends its Balance Sheet to include additional assets resulting to a reduction in deficit, can it avail of the amnesty tax law on the change in networth (still in a deficit position)? What about companies in deficit position that will not amend their Balance Sheets but would want to avail of the tax amnesty, can they qualify?

A-28

Yes, companies in a deficit position can likewise avail of the tax amnesty provided that amendments to the Balance Sheet shall be made resulting to a reduction in the reported deficit. The resulting decrease in the deficit shall be the basis for the computation of the five percent (5%) amnesty tax rate and the amnesty tax payable is whichever is higher between the resulting figure after applying the five percent (5%) on the reduction in capital deficit or the prescribed minimum absolute amount. Companies in a deficit position who will not amend their Balance Sheets are not qualified to avail of the tax amnesty.