RMC No. 44-2012: Publishes the full text of Joint Circular No. 2-2012 of the Department of Finance, Department of Budget and Management and BIR entitled “Providing for the Establishment of the Value-Added Tax (VAT) Tax Credit Certificate (TCC) Monetization Program (“Program”) in Relation to the Special Provisions of Republic Act No. 10155 or the General Appropriations Act of 2012”

Key points

1. Roles of DOF, DBM and BIR. The DOF has the BIR verify outstanding VAT TCCs, confirms they are an obligation of the Republic of the Philippines, endorses applications for financial features, arranges a special account with the trustee bank, and makes Bureau of Treasury facilities available. The DBM ensures funding is in the National Expenditure Program from 2012 to 2016, and the BIR submits its yearly budget accountability report including redemptions on Notices of Payment Schedule (NPS).
2. Where TCCs are received. VAT TCCs solely issued by the BIR must be received by the BIR, and those jointly issued by the DOF-OSS center and the BIR must be received by the DOF-OSS center. This must happen within 3 months from effectivity of the Circular, and a separate Revenue Memorandum Order will cover the verification mechanics.
3. Notice of Payment Schedule. The BIR issues to the owner of a verified TCC an NPS confirming the entitlement to monetization, refundable amount, date of monetization and other information. Only a duly issued NPS is accepted by the BIR or the Government Financial Institutions (GFIs).
4. Maturity and presentation. The maturity date is the expiry date of the VAT TCC, unless revalidated under Section 230(B) of the NIRC, and the NPS must be presented for payment within thirty (30) calendar days before that date. Otherwise it is cancelled and forfeited in favor of the government, and a last day falling on a Saturday, Sunday, holiday or force majeure non-working day moves to the next business day.
5. Early monetization. A taxpayer who monetizes before the maturity date surrenders the NPS to the GFIs. The GFIs give the refundable amount less the applicable discount and give the BIR a list of actual availments.
6. Holders who do not enroll. Holders who fail or do not intend to enroll keep the right to credit TCCs against tax liabilities, or to apply for revalidation under Section 230(B) and/or tax refund (cash conversion) under Section 204(C), subject to law. Cash conversion requests already with the BIR when Executive Order No. 68 took effect may still be processed under Section 5(b) of RR No. 5-2000, subject to availability of funds.

Who is affected

• VAT TCC holders

Deadlines and effectivity

• TCCs to be received within 3 months from effectivity of the Circular
• NPS presented within thirty (30) calendar days before maturity
• Funding in the NEP from 2012 to 2016
• Joint Circular takes effect 15 days from publication in the Official Gazette and at least 2 newspapers of general circulation