RMC No. 115-2024: Clarification of certain policies and procedures relative to the implementation of the Risk-Based Approach in the verification and processing of Value-Added Tax (VAT) Refund Claims, as introduced in Republic Act No. 11976, Otherwise Known as the “Ease of Paying Taxes Act”

Summary

RMC No. 115-2024 clarifies policies and procedures for the risk-based approach in verifying and processing VAT refund claims, as introduced by RA No. 11976 (Ease of Paying Taxes Act).

Key points

1. Complete documents required. All documentary requirements for VAT refund under Section 112(A) of the Tax Code must be submitted regardless of risk level. Completeness is judged against the Checklist of Mandatory Requirements (Annex A.1), and non-compliance means the application is not accepted.
2. Checklisting and 90-day period. Receiving offices check the application form and that schedules follow the prescribed format with supporting documents present. Cursory checking of sales and purchase documents is done after acceptance. The 90-day period to process and decide starts upon acceptance of the claim with complete requirements.
3. Processing sequence. The sequence is checklisting, cursory checking, determining risk level, then processing and verification of medium and high-risk claims. Low-risk claims are automatically recommended for refund, net of sales and purchases tagged as no supporting documents (NSD).
4. NSD and high-risk triggers. NSD sales or purchases are disallowed in the unsupported portion regardless of risk class. If NSD reaches at least 1% of total sales or total claim, the application becomes high-risk with 100% verification. Missing or incomplete schedule information also makes a claim high-risk under RMO No. 42-2024.
5. Low-risk claims. Processing is limited to checklisting and completeness of requirements, with no verification of sales, purchases or input tax. Potential findings are endorsed for verification or incorporated into the existing audit, and noted in the Revenue Officer’s memorandum report.
6. Suppliers and coverage. Medium and high-risk claims still follow RMO No. 23-2023 verification. Input VAT from unselected local suppliers tagged Cannot Be Located (RMC No. 29-2023) or in the RAFT program is disallowed. The Circular covers ongoing claims not yet endorsed for review at its issuance.

Who is affected

• VAT refund claimants
• Receiving and processing BIR offices

Deadlines and effectivity

• 90-day processing period starts upon acceptance of the complete application

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.