RMC No. 54-2014: Clarifies the issues relative to the application for Value-Added Tax (VAT) refund/credit under Section 112 of the Tax Code, as amended

Summary

RMC No. 54-2014 clarifies issues on applications for Value-Added Tax (VAT) refund or credit under Section 112 of the Tax Code, as amended.

Key points

1. Who may apply and when. A VAT-registered person with zero-rated or effectively zero-rated sales may apply for a Tax Credit Certificate (TCC) or refund of creditable input tax within two (2) years after the close of the taxable quarter of the sales. Transitional input tax is excepted, and the input tax must not have been applied against output tax.
2. Complete documents under oath. The application must come with complete supporting documents and a sworn statement that they are complete and are the only documents the taxpayer will present. A juridical person also needs a sworn statement that the signing officer is authorized by its Board of Directors.
3. Processing and denial. No other documents are accepted or required once the claim is submitted, and the decision rests only on what was submitted. A claim lacking complete documents is denied through a Denial Letter from the processing office.
4. The 120 days and 30 days. The Commissioner has 120 days from submission of complete documents to decide, and inaction is deemed a denial. The taxpayer then has 30 days from receiving the decision, or from the end of the 120-day period, to appeal to the Court of Tax Appeals (CTA).
5. Exception for premature filing. From BIR Ruling No. DA-489-03 (December 10, 2003) until its reversal by the Supreme Court in the Aichi case (October 6, 2010), taxpayers need not wait for the 120 days before going to the CTA. This covers premature filing only, not late filing.
6. After a CTA petition. Once a petition for review is filed, the Commissioner loses jurisdiction over the administrative claim, though the Processing Office still evaluates it internally to oppose the judicial claim. Failure to file with the CTA within 30 days after the 120-day period makes the denial or inaction final and unappealable, including for pending claims.

Who is affected

• VAT-registered persons with zero-rated or effectively zero-rated sales

Deadlines and effectivity

• Issued June 17, 2014
• Administrative claim within 2 years after close of the taxable quarter
• Commissioner decides within 120 days
• Judicial claim within 30 days

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