• BIR clarifies rules on VAT refund


    The Bureau of Internal Revenue (BIR) on Tuesday stressed that the rules governing the refund or credit of value-added tax (VAT) payments merely implemented the National Internal Revenue Code (NIRC).

    The BIR made the statement in response to mounting complaints from taxpayers about perceived delays in the processing of applications for VAT refund or credit.

    Local and foreign businessmen have complained that Revenue Memorandum Circular (RMC) 54-2014 made it difficult for taxpayers to exercise their right to file for VAT-related claims.

    It reminded taxpayers that Section 112 of the NIRC provided the period for the processing of VAT refund or credit applications. The bureau also emphasized that the NIRC has been in effect since January 1, 1998.

    Section 112 of the NIRC provides that any VAT-registered person whose sales are zero-rated or effectively zero-rated may, within two years after the close of the taxable quarter when sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax attributable to such sales.

    As such, a taxpayer can file his administrative claim for VAT refund or credit at anytime within a two-year period provided by the NIRC. Once filed, the BIR is given 120 days within which to decide whether to grant or deny the claim.

    If the BIR does not act on the claim after the expiration of the 120-day period, the taxpayer may treat the inaction as an adverse decision on the claim and elevate the case to the Court of Tax Appeals.

    “[RMC 54-2104] merely implements the said provision of law,” the bureau stressed.

    It explained that RMC 54-2014, issued on June 11, sought to address the various complaints received by the BIR with respect to the length of time the agency takes to process claims for refund or credit and grievances over the requirement of submitting additional documents.

    The BIR added, “With the said RMC, the BIR commits itself to process all applications in 120 days and provided certainty to the resolution of the claims of taxpayers.”


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