BIR Late Filing Penalties: Section 248 Surcharge, Section 249 Interest, and RMO 7-2015 Compromise

A late BIR return with tax still unpaid usually costs more than the basic tax: Section 248 of the NIRC adds a 25% surcharge (50% for willful neglect or fraud), Section 249 adds interest commonly computed at 12% per annum, and Revenue Memorandum Order (RMO) No. 7-2015 supplies a separate suggested compromise schedule for non-fraudulent criminal exposure. These three layers are not interchangeable — surcharge and interest are civil additions; the compromise is a consensual alternative to prosecution.

This guide explains each layer, works a concrete ₱100,000 example filed 30 days late, and notes the Ease of Paying Taxes (EOPT) Act reductions for micro and small taxpayers. For the filing calendar that keeps you out of this math, see the 2026 BIR tax filing deadlines calendar. Related penalty deep-dives: deficiency vs delinquency interest, RMO No. 7-2015 compromise penalties, civil vs criminal liability, BIR Form 2307 penalties, and RELIEF SLSP deadlines and penalties.

What does Section 248 surcharge cover? #

Section 248 of the NIRC imposes a civil penalty on top of the basic tax when a return is filed late, tax shown on a return is paid late, or a deficiency is not paid within the time stated in the BIR’s notice — generally 25% of the tax due, or 50% when the failure is willful neglect or the return is false or fraudulent. The surcharge is not optional and does not require a compromise agreement; it attaches as a civil addition once the statutory trigger is met.

Substantial under-declaration of sales or income, or substantial overstatement of deductions, can constitute prima facie evidence of a false or fraudulent return under the Code’s implementing rules — which is why a “simple late filing” and a fraudulent return are not priced the same.

What does Section 249 interest cover? #

Section 249 interest runs on the unpaid tax from the date it should have been paid until it is actually paid, at double the legal interest rate prescribed by the Bangko Sentral ng Pilipinas — commonly applied as 12% per annum for ordinary taxpayers after the TRAIN Law amendments took effect on January 1, 2018. BIR clarifications after TRAIN also emphasize that deficiency and delinquency interest are no longer stacked the old pre-TRAIN way for post-2018 periods; the applicable interest follows the current Section 249 framework instead.

Interest is computed on the unpaid basic tax (and interacts with how assessments are stated), separate from the Section 248 surcharge percentage. Paying only the basic tax after the deadline without surcharge and interest does not clear the account.

What is the RMO No. 7-2015 compromise penalty? #

RMO No. 7-2015 is the BIR’s revised consolidated schedule of suggested compromise amounts for non-fraudulent criminal violations of the Tax Code — an offer in lieu of prosecution, not a third automatic civil percentage like surcharge. The order updates earlier schedules (including RMO No. 19-2007) and directs revenue officers to follow the annexed amounts for covered violations, while still allowing higher compromises or, with proper approval, lower ones.

Important distinctions:

• Compromise under RMO No. 7-2015 is consensual — refusal can lead to criminal referral rather than forced collection of the schedule amount as if it were surcharge
• It should appear separately from the assessment of basic tax, surcharge, and interest
• Paying a compromise does not by itself erase Section 248/249 civil additions

Worked example: ₱100,000 tax filed 30 days late #

Assume an ordinary (non-micro/small) taxpayer owes ₱100,000 of tax that was due on Day 0, files and pays 30 days late, without willful neglect or fraud, and for illustration we ignore any separate compromise discussion until after the civil additions.

If the same facts involved willful neglect, the surcharge column would be ₱50,000 (50%) instead of ₱25,000, and criminal exposure would sit on top of the civil bill. A suggested RMO No. 7-2015 compromise, if offered and accepted for the filing violation, would be an additional negotiated amount — not a substitute for the ₱25,000 surcharge or the interest.

How does the EOPT Act change rates for micro and small taxpayers? #

The Ease of Paying Taxes (EOPT) Act (Republic Act No. 11976), implemented for these concessions by Revenue Regulations No. 6-2024, reduces the civil surcharge to 10% and cuts Section 249 interest to 50% of the normal rate (commonly 6% per annum) for qualifying micro and small taxpayers. Under the EOPT classification rules, a micro taxpayer generally has gross sales under ₱3,000,000 for the taxable year, and a small taxpayer generally has gross sales from ₱3,000,000 to less than ₱20,000,000. The 50% surcharge for willful neglect or fraudulent returns still applies even to covered taxpayers.

Using the same ₱100,000 / 30-day-late facts for a qualifying micro or small taxpayer:

Confirm classification with your registration and latest gross-sales basis before assuming the reduced rates — misclassifying yourself as micro or small does not bind the BIR.

Frequently asked questions #

What is the BIR surcharge for late filing under Section 248? #

Section 248 of the NIRC generally imposes a civil penalty (surcharge) of 25% of the tax due for failure to file a return and pay the tax on time, failure to pay a deficiency within the time stated in a notice, or failure to pay the tax shown on a return by the due date. The rate rises to 50% in cases of willful neglect to file or a false or fraudulent return.

What interest rate applies under Section 249? #

Section 249 of the NIRC, as amended by the TRAIN Law, imposes interest on unpaid tax at double the legal interest rate prescribed by the Bangko Sentral ng Pilipinas. Under the commonly applied BSP benchmark since TRAIN took effect, that produces a 12% per annum interest rate for ordinary taxpayers until a new rate is prescribed.

Is the RMO No. 7-2015 compromise penalty mandatory? #

No. Revenue Memorandum Order No. 7-2015 sets a revised schedule of suggested compromise amounts the BIR may accept in lieu of criminal prosecution for non-fraudulent violations. Payment is consensual — if the taxpayer refuses the suggested compromise, the BIR may pursue criminal action instead of treating the schedule amount as an automatic civil assessment.

Do micro and small taxpayers pay lower late-filing penalties? #

Yes, under the Ease of Paying Taxes (EOPT) Act as implemented by Revenue Regulations No. 6-2024. Qualifying micro and small taxpayers generally face a reduced 10% surcharge (instead of 25%) and interest at 50% of the Section 249 rate (commonly 6% per annum instead of 12%), except where the 50% willful-neglect or fraud surcharge still applies.

How do surcharge, interest, and compromise differ? #

Surcharge (Section 248) and interest (Section 249) are civil additions that attach to unpaid tax without requiring the taxpayer’s consent. The RMO No. 7-2015 compromise is a separate, suggested amount to settle potential criminal liability for the violation and does not replace the surcharge or interest unless a specific abatement or compromise of the civil liability is separately granted.

Summary #

Late filing turns a ₱100,000 tax bill into roughly ₱126,000 after 30 days once the ordinary 25% surcharge and 12% annual interest are applied — before any RMO No. 7-2015 compromise discussion. Micro and small taxpayers under RR No. 6-2024 can see lower civil rates (10% surcharge and half interest), but willful neglect and fraud still draw the 50% surcharge. The cheapest penalty is still avoidance: file on the statutory due date using a reliable calendar such as the 2026 BIR deadlines guide, and treat surcharge, interest, and compromise as three different problems rather than one lump “penalty.” These are civil penalties distinct from the criminal liability discussed in Suarez v. People in the Day in Court series.