What interrupts the prescriptive period in criminal tax cases?
By: Atty. Lew Earvin H. Manarin on August 27, 2026
PRESCRIPTION serves an important purpose in criminal law. While the state is given sufficient time to investigate and prosecute offenses, it cannot indefinitely leave a person exposed to prosecution. Once the prescriptive period expires, the state generally loses the right to prosecute.
For violations of the National Internal Revenue Code (Tax Code), this issue recently came into focus in People v. Consebido (G.R. No. 258563, April 2, 2025), where the Supreme Court clarified what act interrupts the running of the prescriptive period for criminal tax offenses.
Under Section 281 of the Tax Code, violations prescribe after five years. Prescription generally begins to run from the day the violation is committed, or, if not known at the time, from discovery. When the period begins is only half the equation, however, equally important is what act interrupts its running.
The Consebido case
This case stemmed from an alleged violation of the Tax Code’s VAT provisions. The accused was charged with willful failure to file his quarterly VAT return for the third quarter of 2008, due on Oct. 25, 2008.
Only on Jan. 30, 2014 did BIR officers filed a joint complaint-affidavit and referred the matter to the Department of Justice (DOJ) for preliminary investigation. The information was subsequently filed before the Court of Tax Appeals (CTA) in 2019.
The Supreme Court agreed that the offense had prescribed. The BIR could have readily discovered the accused’s failure to file when the return became due, so the five-year period ran from Oct. 25, 2008 and expired on Oct. 25, 2013. By the time the complaint was filed with the DOJ in January 2014, the offense had already prescribed.
More significant than the result, however, was the rule the court laid down for future cases.
The second paragraph of Section 281 of the Tax Code states that prescription begins to run from the commission of the violation, or, if unknown at the time, from its discovery and the institution of judicial proceedings. Its next paragraph, however, provides that prescription “shall be interrupted when proceedings are instituted against the guilty persons.” A prior ruling had read the first paragraph to mean that prescription only begins upon institution of judicial proceedings, effectively making Tax Code violations imprescriptible, since prosecution could be commenced no matter how much time had passed.
The court in Consebido departed from this literal reading as leading to an absurd result the legislature could not have intended. It clarified that institution of proceedings is the act that interrupts, not begins, prescription, harmonizing Section 281’s paragraphs. The period runs from commission or discovery and is later interrupted once proceedings are instituted, rather than being commenced and stopped by the same act.
Having settled that institution of proceedings interrupts prescription, the remaining question was before which body this must take place, since Section 281 does not use the word “court” but simply refers to “proceedings.” Earlier decisions distinguished between offenses covered by special laws and those governed by rules on summary procedure, holding that prescription was interrupted only upon the filing of the Information in court and not by the commencement of preliminary investigation before the prosecutor.
Other decisions, however, recognized a different rule for violations of special laws, holding that proceedings before the prosecution office may interrupt prescription. This reflected the present system where preliminary investigation is ordinarily conducted by prosecutors rather than by judges.
This created an obvious practical problem: prescription could continue running while a complaint was pending before the prosecution office, causing the state to lose the right to prosecute simply because preliminary investigation was not completed in time.
The Supreme Court confronted this problem squarely in Consebido. It observed that delays in preliminary investigation may occur despite the complainant having done everything necessary to initiate prosecution and considered it unjust for the state to lose that right over delays beyond its control. As the court explained, what the offended party can principally do to commence the process is file the complaint.
The court, therefore, adopted a new rule: the filing of the criminal complaint before the DOJ or prosecution office interrupts the running of the prescriptive period. For Tax Code offenses, filing before the DOJ interrupts prescription, whether the offense was immediately known or discovered later. Once timely filed, the government no longer has to race against the same prescriptive period while preliminary investigation is underway.
A rule for future cases
The court recognized that this new rule operates against the accused. Under the previous rule, an accused could invoke prescription if the information was not timely filed in court, even if a complaint had earlier been filed with the prosecution office. The court, therefore, held that the new rule applies only prospectively, consistent with the principle that prescription rules should be interpreted in favor of the accused.
This qualification is significant. Consebido does not extend the government’s ability to prosecute old tax cases already prescribed under the previously applicable rules; it changes the governing rule moving forward.
The CTA has already applied this prospectivity qualification in several cases, consistently holding that the new rule cannot be invoked to disturb conclusions on prescription reached under the previous doctrine. In short, the new rule governs complaints filed with the DOJ after Consebido, while the previous rule continues to apply to those filed before it.
At first glance, Consebido appears to raise a technical procedural question: whether prescription is interrupted upon filing with the DOJ, or only when an information reaches the court. The difference, however, can be substantial.
Preliminary investigations may take months or even years. Under a rule requiring the information itself to be filed within the prescriptive period, the government’s prosecution window depends on how quickly preliminary investigation is resolved. Under Consebido, timely referral to the DOJ is enough to interrupt the prescriptive period.
For taxpayers and BIR alike, Consebido provides an important new marker for determining whether a criminal tax case has prescribed. In prescription cases, dates have always mattered. After Consebido, one date matters even more: the date the criminal complaint is filed before the prosecution office.
Lew Earvin H. Manarin is an Associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com
The article was published at the More to Follow Column at The Manila Times on August 27, 2026. Please see this link.