Compromise in taxation

Compromise over taxes is allowed by Philippine tax laws. A compromise is a contract whereby the parties, by adjusting and giving in to the other's demands for the purpose avoiding litigation or putting an end to one already commenced, come to an agreement regarding the matter in dispute which, in case of taxation, is taxes due which the taxpayer needs to pay and the government wants to collect.

The person entering such compromise must be duly authorized to do so and the object (especially the rate at which the compromise is met) must be lawful.