RMC No. 37-2007: Clarifies and modifies the scope relative to the delegation of authority to sign rulings granting and/or confirming tax exemptions, tax incentives as well as tax treaty relief through the ruling process

Summary

RMC No. 37-2007 clarifies and modifies the Memorandum dated April 26, 2007, circularized in RMC No. 32-2007, on who signs rulings granting or confirming tax exemptions, tax incentives and tax treaty relief.

Key points

1. Rulings moved from Regional Directors to ACIR-LS. Rulings involving the granting or confirmation of tax exemptions and tax incentives are now approved and signed by the ACIR-LS. RMO No. 75-99 and RMC No. 3-2001 are modified accordingly. Regional Directors keep requests to use pre-numbered loose-leaf forms, receipts, invoices and manual books of accounts, and requests to change the accounting period under Section 46 of the Tax Code of 1997 (except a change of accounting method).
2. Rulings moved from ACIR-LS to DCIR-LIG. The DCIR-LIG now signs rulings granting or confirming tax exemptions, tax incentives and tax treaty reliefs, including those from the VAT Review Committee. This is allowed only if they are not covered by the listed exceptions and are clearly covered by precedent rulings, guidelines and pertinent issuances. RDAO No. 4-02, RMO No. 30-02 and RMC No. 39-01 are modified accordingly.
3. What the ACIR-LS still signs. The ACIR-LS keeps rulings on tax-deferred exchanges of property for shares under Section 40(C)(2), property transfers by a pre-need corporation to a trustee, exchanges that correct clear mistakes of fact on subdivision lot ownership, embassy tax exemption requests, tax exempt status of non-stock non-profit educational institutions, and topics covered by RMC No. 2-01 and RMC No. 10-01.
4. Commissioner and copies. Rulings of first impression under Revenue Administrative Order No. 1-03 are signed by the Commissioner. The Commissioner may reverse, modify or alter an ACIR-LS or DCIR-LIG ruling after due notice to the taxpayer and in accordance with Section 246 of the Tax Code of 1997. Copies of ACIR-LS rulings go to the ODCIR-LIG and the OCIR, and copies of DCIR-LIG rulings go to the OCIR.
5. Strict evaluation and pending requests. Claims and requests for tax exemptions must be strictly evaluated, and any doubt is resolved in favor of the government. Requests already elevated under RMC No. 32-2007 before this Circular are signed by the officials already indicated in the drafts.

Who is affected

• Regional Directors
• ACIR-LS
• DCIR-LIG
• Taxpayers requesting exemption, incentive or treaty relief rulings

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