Tax Digest
Volume 10,
Series 60
Clarification on the Rules of the Application for VAT Refund or Tax Credit Certificate

The Bureau of Internal Revenue (BIR) released a clarification about the process of Value-Added Tax (VAT) refund or Tax Credit Certificate (TCC) conversion concerning the previously issued Revenue Memorandum Circular (RMC) 54-2014 which was given a retroactive effect where pending claims were deemed denied upon expiration of the 120-day period from which the Commissioner can decide whether to grant the claim or not.

However, the Supreme Court has stated, in the case of Pilipinas Total Gas vs. The Commissioner of Internal Revenue (G.R. No. 207112 dated December 8, 2016), that taxpayers have every right to pursue their claims in the manner provided by existing regulations at the time it was filed. Hence, the RMC cannot be applied retroactively as it would prejudice taxpayers that already filed for VAT refund or TCC and were pending before the effectivity of the RMC.

The administrative claims filed prior to the effectivity of RMC 54-2014 shall be governed by the following rules:

  1. Taxpayer-claimant shall have until the prescription of 2-year period to submit documents supporting the claim. That only upon submission of complete documents shall the application be deemed officially received;
  2. Should the taxpayer-claimant did not file additional documents from the date the application was filed, the 120-day period shall run from such date, otherwise from the last day the taxpayer submitted documents or prescription of 2-year period, whichever comes first; and
  3. That the administrative claim shall be available documents submitted and that the result must be communicated in writing.
It has been declared that the following shall not be covered by the stated rules:
  1. Claims filed beyond the two-year prescriptive period;
  2. Denied in writing by the approving authority;
  3. Approved or granted fully or partially by the approving authority; and
  4. Already appealed to and pending with the Court of Tax Appeals (CTA) unless there is proof of withdrawal of the case filed with the CTA.

Revenue Regulations No. 1-2017
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