RR No. 26-2018: Amends certain provisions of RR No. 13-2018 to implement the 90-day processing of claim for VAT refund under Section 112 (C) of the Tax Code of 1997, as amended by RA No. 10963 (TRAIN Law)

Key points

1. Sections amended. Sections 4.106-5, 4.108-5, 4.112-1 and 13 of RR No. 13-2018 are further amended.
2. Zero-rated sales become 12% VAT. Certain zero-rated sales of goods and services (items 2, 3 and 4 for goods, and subparagraphs b(1) and b(5) for services) become subject to 12% VAT instead of 0%. This happens once two conditions are met: an enhanced VAT refund system that pays refunds within ninety (90) days from filing is in place, and all VAT refund claims pending as of December 31, 2017 are fully paid in cash by December 31, 2019.
3. When the 90 days run. The period runs from filing of the claim until release of the refund payment. A claim counts as filed only on submission of the official receipts or invoices and other supporting documents.
4. Grant or denial. The Commissioner grants refunds of creditable input tax in proper cases within 90 days. If a grant is not proper, the Commissioner states the legal and factual basis for denial in writing.
5. Appeal and late action. A taxpayer may appeal a full or partial denial to the Court of Tax Appeals within thirty (30) days from receipt of the decision. BIR personnel who fail to act within 90 days are punishable under Section 269, and a claim still unpaid after 90 days may continue to be processed administratively.
6. Coverage. The 90-day processing period, now including payment, applies to claims filed upon effectivity of the Regulations.

Who is affected

• VAT refund claimants
• BIR officials and employees processing VAT refunds

Deadlines and effectivity

• Refund processing: 90 days from filing
• Pending claims as of December 31, 2017 paid in cash by December 31, 2019
• Appeal to CTA within 30 days from receipt of denial