BIR defends VAT refund ruling

MANILA, Philippines - The Bureau of Internal Revenue (BIR) defended yesterday the implementation of a ruling with respect to the processing of value-added-tax refunds, saying such a regulation has been in effect since 1998.

The BIR cited Sec. 112 of the National Internal Revenue Code which states that the Commissioner shall grant a refund or issue the tax credit certificate within 120 days from the date of submission of complete documents.

“In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within 30 days from the receipt of the decision denying the claim or after the expiration of the 120-period, appeal the decision or the unacted claim with the Court of Tax Appeals (CTA),” Sec. 112 of the NIRC further said.

Revenue Memorandum Circular 54-2014 merely implements the said provision of law, the BIR said.

Since the implementation of RMC 54-2014 up to the end of Sept. 2014, the BIR received 134 applications for VAT refund/credit, processed for approval 68 applications for tax credit, 3 applications for refund and 2 applications for BOC (purely importation), and denied 31 applications, the government’s main tax collection agency said.

The BIR maintained that RMC 54-2104 merely seeks to address the various complaints it receives with respect to the length of time the agency takes to process claims for refund/credit and complaints.

“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,” the agency said.

The BIR also pointed out that the circular now enumerates all the documents that must be submitted to support the application for VAT refund/credit. Upon submission of the claim and its supporting documents, the claim shall be processed and no other documents shall be accepted/required from the taxpayer.