RMO No. 47-2020: Consolidates and updates the guidelines and procedures on the processing of claims for Value-Added Tax Credit/Refund, except those under the authority and jurisdiction of the Legal Group

Key points

1. Priority and receiving offices. Claims under Section 112 of the Tax Code are prioritized. The VAT Credit Audit Division receives claims of direct exporters under Section 112 (A), except those with a mix of zero-rated sales from renewable energy power or fuel under Section 108(B)(7). The RDO or LTAD where the taxpayer is registered receives claims of other zero-rated taxpayers and indirect exporters, and claims of taxpayers with cancelled VAT registration or for erroneously or illegally collected VAT under Sections 112 (B) and 229.
2. Complete documents and Delinquency Verification Certificate. Only applications with the complete requirements in the applicable Checklist (Annexes A.1, A.2 or A.3), filed within the prescribed period, are received. The Delinquency Verification Certificate (DVC) must show no outstanding final and executory tax liabilities.
3. Delinquent accounts. An application is not received if the DVC shows delinquent accounts other than VAT. Outstanding VAT liability may be deducted from the approved BIR portion of the claim, and the application is accepted if that VAT is lower than the claim on local purchases. If the claim is purely or partly importations and the BIR portion cannot cover the liability, it is not accepted without proof of full payment.
4. Verification and 90-day period. The Head of the processing office issues Tax Verification Notices (TVNs), still manually for now. The ninety (90) day period under Section 112 (C) starts from the actual filing of the application with complete documents. Processing is not an audit, so an electronic Letter of Authority may be issued later, and books relevant to the claim may be examined on the Revenue Officer’s request.
5. Review and approving officials. Reports are reviewed by the Tax Audit Review Division (VCAD dockets), the Regional Assessment Division (RDO dockets) or the Office of the Head Revenue Executive Assistant of the LTS (LTAD dockets). For VCAD claims, up to ₱ 50 Million is approved by the Assistant Commissioner (ACIR) Assessment Service, more than ₱ 50 Million up to ₱ 150 Million by the Deputy Commissioner (DCIR) Operations Group, and more than ₱ 150 Million by the Commissioner. LTAD claims are approved by the ACIR-LTS and RDO claims by the Regional Director, regardless of amount.
6. Result of claim. The result, approval or denial, is signed by the authorized revenue official and sent by the originating processing office. Manually issued TCCs are converted to the Tax Credit Refund System in the ITS.

Who is affected

• VAT credit/refund claimants
• VAT Credit Audit Division, RDOs and LTADs
• Direct exporters and other zero-rated taxpayers

Deadlines and effectivity

• 90 days from actual filing with complete documents (Section 112 (C))