RMC No. 21-2012: Circularizes the full text of Executive Order No. 68 entitled “Monetization Program of Outstanding Value-Added Tax (VAT) Tax Credit Certificates (TCCs)”

Key points

1. Two options. Qualified VAT-registered taxpayers may collect in advance a discounted cash value of their TCCs from a trustee bank. They may instead collect the full cash value on a maturity date set by the BIR or Bureau of Customs under the implementing rules.
2. TCCs covered. The program covers outstanding VAT TCCs issued under Section 112 (A) of RA 8424, as amended. It also covers the outstanding VAT component of drawback TCCs issued under Section 106 (e) of the TCCP, as amended.
3. Five-year period. The program is spread over five years, from 2012 to 2016. Funding is included in the National Expenditure Program for those years.
4. DOF directions. The DOF directs the BIR and BOC to verify the outstanding VAT TCCs. Subject to existing laws, they confirm in writing that these TCCs are an obligation of the Republic of the Philippines, endorse applications for financial features, arrange a special account with the trustee bank, and make Bureau of Treasury facilities available.
5. Notice and rules. The BIR or BOC issues the Notice of Payment Schedule to VAT TCC holders after verification. The DBM, DOF, BIR and BOC jointly issue the IRRs.
6. End of refund TCCs. Beginning 2012, the BIR and BOC no longer issue TCCs for VAT refund, unless the VAT taxpayer applies for them under Section 112 (A) of RA 8424, as amended, and Section 106(e) of the TCCP, as amended.

Who is affected

• Qualified VAT-registered taxpayers holding outstanding VAT TCCs

Deadlines and effectivity

• Program period: 2012 to 2016
• From 2012: no VAT refund TCCs unless applied for